DAILY - UPDATED
Kia Motors turns to profit in the fourth quarter of 2008
Kia Motors announced today that it’s net profit nearly doubled in the final, fourth quarter of the 2008 as sales of it’s popular new cars rose.
Kia Motors, which with it’s parent Hyundai Motor Company forms the world’s fifth-largest automotive group, reported net profit of 74.8 billion won ($54.7 million) in the October-December period, reversing a net loss of 22.1 billion won ($16 million) in the previous quarter.
Kia’s 2008 full-year sales rose to 16.4 trillion won from 15.9 trillion won a year earlier, while it’s annual net profit soared more than eightfold to 113.8 billion won ($82 million), from 13.6 billion won in 2007. Its 2008 operating profit stood at 308.5 billion won, turning around from an operating loss of 55.4 billion won in 2007.
“Despite the economic crisis, Kia Motors was able to reap both an operating and a net profit last year, thanks to the brisk sales of new models such as Forte and Soul crossover and the weaker won,” the company said in a statement.
The South Korean won fell 25.7 percent against the dollar last year. A weaker won boosts profits of the country’s exporters when their overseas sales are converted into local currency and also makes South Korean products cheaper in overseas markets.
The outlook for Kia is grim among a global recession and financial crisis that have hit worldwide car sales and squeezed credit. The maker of the Picanto minicar, however, is expected to weather the storm better than many of its peers, analysts said.
“Given slowing global car demand, the worldwide industry outlook is dark. But Kia is expected to improve its earnings further on a weaker won and small cars, especially from the end of the second quarter when global economic stimulus packages are likely to take effect,” said Song Sang-hoon, an auto analyst at Kyobo Securities.
For all of 2009, Kia is expected to post a 472.1 billion won ($344 million) net profit, up from a 113.8 billion won ($82 million) profit last year, according to Reuters estimates. [Source: Reuters]