Kia Motors quarterly profit swells
SEOUL: Kia Motors Corp. said net profit swelled to 402 billion won ($339 million) in the third quarter after a loss the year before boosted by a weak South Korean won and global efforts to spur demand for vehicles.
South Korea's second-largest automaker, maker of the Sportage compact SUV and Forte small sedan, said Friday that quarterly sales rose 32 percent to 4.51 trillion won from 3.43 trillion won a year earlier. It posted a net loss of 22.1 billion won in the third quarter of 2008.
Yonhap news agency said the net profit was Kia's highest on a quarterly basis, citing company officials. Kia spokesman Michael Choo said he could not immediately confirm the report.
In a press release, Kia said its global auto sales jumped in the third quarter, rising 30 percent to 279,969 vehicles from last year. For the first nine months of 2009 net profit surged to 846 billion won from 39 billion won the same period last year.
Revenue rose 12 percent to 12.69 trillion won and auto sales rose 6.8 percent to 739,000 vehicles. The company attributed the performance to weakness in the South Korean won against the dollar and to government incentives in South Korea and overseas to stimulate vehicle purchases.
Kia is an affiliate of South Korea's Hyundai Motor Co. Together, they form the world's fifth-largest automotive group.
Both companies have been expanding aggressively overseas in recent years. Kia has plants in China and Slovakia and has completed one in the United States with production scheduled to begin soon.
KIa's results came a day after Hyundai Motor announced that third quarter net profit more than tripled to a record high for a second straight quarter amid sharply higher sales. Both Hyundai and Kia have benefited from won weakness, which helps make their products more competitive in overseas markets.
A weaker currency can also increase the value of profits earned overseas when they are sent back to South Korea and converted into the local currency. The won declined 14 percent on average in the third quarter this year against the dollar compared with the same period last year.