Kia Q3 net rises over 2% on new, hybrid models

This undated picture shows Kia, left, and Hyundai Motor's headquarters in Seocho District, Seoul. Courtesy of Hyundai Motor Group

Kia, Korea's second-largest carmaker, said Friday its third-quarter net profit rose 2.1 percent from a year earlier, helped by all-new and gasoline hybrid models despite sluggish industrial demand.

Net profit for the three months to September increased to 2.26 trillion won ($1.6 billion) from 2.22 trillion won over the same period of last year, the company said in a statement.

Robust demand for new models, such as the all-electric EV3 SUV and the upgraded K8 sedan, and gasoline hybrid cars that offset slowing sales of electric vehicles helped prop up the quarterly results, the statement said.

In the September quarter, Kia put aside 630 billion won in provisions for engine warranty extensions in the U.S. market, keeping the company from posting a higher net result, it said.

Kia expected slowdown in EV sales, geopolitical risks and higher costs deriving from tougher competition with rivals to remain major concerns for carmakers for the rest of the year.

To support growth, the company said it will focus on expanding sales of gasoline hybrid versions of its Sportage and Sorento SUVs, as well as the Carnival minivan, in the fourth quarter.

Operating profit climbed 0.6 percent to 2.88 trillion won in the third quarter from 2.86 trillion won a year ago. Sales were up 3.8 percent to 26.52 trillion won from 25.54 trillion won over the cited period.

Kia has revised up its earnings guidance for the year as it expects sales of gasoline hybrid models will remain strong in the fourth quarter.

The maker of Sorento SUVs and K5 sedans is now targeting to achieve an operating profit of 12.8 trillion won to 13.2 trillion won on sales of 105 trillion won to 110 trillion won this year.

The new targets are up from the figures of 12 trillion won and 101.1 trillion won announced earlier in the year.

Meanwhile, Kia plans to cancel the remaining half of 500 billion won worth of treasury stocks it repurchased in the first half within the year to enhance shareholder value. The other half was already canceled in May. (Yonhap)