Kia posts record 2023 sales, profit with bold 2024 business targets

Kia Corp., South Korea’s second-largest automaker, on Thursday posted record 2023 profit and sales revenue, driven by strong sales of pricey models and an improved product mix.

Kia, a unit of Hyundai Motor Group, also offered bold sales and profit targets for this year despite growing concerns about the slowing pace of electric vehicle uptakes globally.

Its net profit last year reached a record 8.78 trillion won ($6.6 billion), up 62.3% from 5.41 trillion won a year earlier, the company said in a regulatory filing.

Operating profit climbed to its all-time high of 11.6 trillion won on a consolidated basis, a 60.5% on-year increase. Sales rose 15.3% to a record 99.8 trillion won from 86.6 trillion won.

The company’s full-year operating profit margin was 11.6%, its first double-digit margin.

“Our spectacular results last year were thanks to record global vehicle sales, increased sales of high-end models and favorable dollar-won exchange rates,” the company said in a statement.

Kia, a sister firm of Hyundai Motor Co., sold a record 3.08 million vehicles globally in 2023.

WON’S STRENGTH VS DOLLAR HURTS Q4 PROFIT

In the fourth quarter, Kia posted 1.6 trillion won in net profit, down 20.5% from 2.04 trillion won in the year-earlier period. Operating profit fell 6% to 2.47 trillion won from 2.62 trillion won. Sales rose 5% to 24.33 trillion won from 23.16 trillion won.

The company said increased sales incentives to dealers amid fierce competition and the won’s strength against the dollar hurt its fourth-quarter earnings.

Its fourth-quarter global vehicle sales rose 0.4% year on year to 733,155 units, including 594,4121 units in overseas sales.

Despite a weaker operating profit in the fourth quarter, the company said it posted a double-digit operating profit margin for the fifth straight quarter.

AGGRESSIVE 2024 GOAL

Kia said it aims to achieve 12 trillion won in operating profit on sales of 101.1 trillion won this year, up 3.4% and 1.3% from last year, respectively, as it continues its EV push with a strengthened eco-friendly vehicle lineup.

The company targets a 2024 operating profit margin of 11.9%.

“We expect to sell more high-end eco-friendly models in the US and European markets this year,” Kia said.

Meanwhile, the company said it would buy back 500 billion won worth of treasury shares this year and retire half of them from the market by the end of June to boost shareholder value.

If it successfully achieves the presented 2024 sales and profit targets, it will retire the remaining 50% of the repurchased treasury shares by year-end, it said.

Kia shares rose 3.9% to 91,300 won in early trade in Seoul following the earnings announcement. The broader benchmark Kospi index fell 0.4%.

Hyundai Motor is scheduled to release its fourth-quarter and full-year results later in the day.

Write to Jae-Fu Kim at hu@hankyung.com

In-Soo Nam edited this article.