Kia Motors Corp Profit Increases 67% on U.S. Sales

Indonesia stock info - Kia Motors Corp Profit Increases 67% on U.S. Sales ; Kia Motors Corp. (000270), the world’s best- performing major auto stock this year, posted a 67 percent increase in second-quarter profit as it sold more sedans and sports utility vehicles in the U.S.

Net income was 1.13 trillion won ($1.07 billion) in the three months ended June 30, up from a revised 676.1 billion won a year earlier, the Seoul-based company said in a regulatory filing today. This compares with the 913 billion won average of six analyst estimates compiled by Bloomberg.

Kia sold 21 percent more cars than a year earlier, boosted by a 36 percent surge in exports to the U.S., where the company sold more K-5 sedans and Sorento SUVs. Deliveries in the U.S. will keep rising this quarter while Kia’s market share may slip as Japanese automakers return production to normal levels after the March earthquake, said Yim Eun Young, an analyst at Dongbu Securities Co.

“As long as the company retains the current sales volume, the impact on profits will not be that big,” Yim, who is based in Seoul, said before the announcement. “What Kia has to look out for in the second half is the impact of the strong Korean currency.”

Kia’s shares rose 1 percent to 78,300 won at 9:33 a.m. in Seoul. The stock has surged 55 percent this year, the most of 26 major automakers tracked by the Bloomberg World Auto Manufacturers Index.

The won has advanced 6.4 percent this year, making it Asia’s second-best-performing currency in 2011. It is forecast to strengthen to 1,050 won per dollar this quarter, according to estimates compiled by Bloomberg.

Operating Profit

Operating profit, or sales minus the cost of goods and administrative expenses, rose 56 percent to 1.03 trillion won from 662.2 billion won, the carmaker said. Sales by value rose 25 percent to 11.58 trillion won.

The sales of vehicles produced in the U.S. almost doubled in the second quarter from year earlier, according to data on Kia’s website.

Kia, South Korea’s second-largest automaker, sold 621,000 units in the April to June period, 21 percent more than the previous year, according to a regulatory filing.

Hyundai Motor Co., which owns 34 percent of Kia, yesterday reported that second-quarter profit rose to 2.3 trillion won from 1.68 trillion a year earlier, as the company increased production to fill the void left by disruptions at Japanese rivals.


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