(LEAD) Kia Q2 net jumps 52 pct on weaker won

All News 10:51 July 23, 2019

(ATTN: ADDS photo and details in paras 5-8, 10-13)
By Choi Kyong-ae

SEOUL, July 23 (Yonhap) -- Kia Motors Corp., South Korea's second-biggest carmaker by sales, on Tuesday said its second-quarter earnings jumped 52 percent on a weaker local currency.

Net profit for the April-June period soared to 505 billion won (US$430 million) from 332 billion won a year earlier, Kia said in a statement.

"The won's weakness against the U.S. dollar was the main contributor to the increased net profit. Decreased U.S. incentives and lower global inventories also buoyed the bottom line, offsetting weak sales at home and in China," a company spokesman said.

The Korean won fell to an average of 1,165.91 against the U.S. dollar in the second quarter, from 1,078.57 in the same period a year ago, according to the Bank of Korea. A weak won makes South Korean exports more price competitive overseas and lifts the value of repatriated profit.

Lack of new models weighed on domestic sales in the second half, and sales in China, the world's biggest automobile market, continued to fall in the face of a slowing economy, a trade war with the U.S. and a lack of competitive models, Kia said in a statement.

In contrast, the Telluride sport utility vehicle and the Soul boxcar helped boost U.S. sales. The Telluride, produced in Kia's U.S. plant, was launched in the U.S. last year and sold only in North American markets.

As the company has recently launched its entry-level Seltos and plans to add the upgraded flagship Mohave to its SUV lineup later this year, it expects to report robust earnings results in the coming quarters.

Kia has strengthened its SUV lineup with competitive models to take advantage of rising demand for recreational vehicles. Kia's SUV lineup is composed of the flagship Mohave, midsize Sorento, compact Sportage, subcompact Stonic, Soul boxcar and Niro hybrid models.

The company's operating profit jumped 51 percent to 534 billion won in the second quarter from 353 billion won a year ago. Sales were up 3.2 percent to 14.51 trillion won from 14.06 trillion won.

From January to June, Kia saw its net profit jump 51 percent to 1.15 trillion won from 764 billion won a year earlier. Its first-half operating profit soared 71 percent on-year to 1.13 trillion won on sales of 26.95 trillion won for a 1.2 percent on-year gain over the cited period.

In the first half, Kia sold a total of 1,352,629 vehicles, down 2.4 percent from 1,386,408 units in 2018, achieving 46 percent of its annual sales target of 2.92 million units.

On Monday, Hyundai Motor Co., which owns a 34 percent stake in Kia, reported a 23 percent on-year gain in second-quarter net profit at 999 billion won, helped by a weak won and strong sales of new models such as the Palisade SUV.