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Kia Q1 net jumps 50 pct on provision reversal, weak won

Autos 10:02 April 25, 2019

SEOUL, April 25 (Yonhap) -- Kia Motors Corp.'s first-quarter net profit jumped 50 percent from a year earlier on a provision reversal and a weak won, the company said Thursday.

Net profit for the January-March quarter jumped to 649 billion won (US$562 million) from 432 billion won in the year-ago period, Kia Motors said in a statement.

"The reversal of some of the provisions for overdue wages payment was reflected in the quarterly bottom line, and the won's weakness against the U.S. dollar resulted in increased profit," a company spokesman said.

Kia set aside about 1 trillion won in the third quarter of 2017 as a local court ordered the company to retroactively deliver overdue payments to its employees. The court said regular bonuses should be included in the "ordinary wage" used as the basis for calculating overtime, severance and other payments.

The company has recently completed overdue payments to its workers, and the remaining provisions were returned to the quarterly results, the spokesman said.

The won weakened to an average of 1,125.08 against the dollar in the first quarter from 1,072.29 a year ago. A weak won drives up the value of dollar-denominated earnings when carmakers convert them into the local currency.

Operating profit almost doubled to 594 billion won in the third quarter from 306 billion won a year ago. But sales fell 0.9 percent to 12.44 trillion won from 12.56 trillion won during the same period.

Robust sales of the Telluride SUV in the United States and an increased unit sale price helped drive up the operating income. Sales fell as domestic sales declined due to a lack of new SUV models, the statement said.

The Telluride is produced at Kia's U.S. plant and sold only in North American markets.


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