Kia delivers Q4 earnings surprise; operating profit hits all-time high

Kia Corp., South Korea’s second-largest automaker, on Wednesday posted a record quarterly operating profit on the back of strong sales of high-end and recreational vehicles.

The automaking unit of Hyundai Motor Group said its fourth-quarter operating profit more than doubled to a record 1.28 trillion won ($1.16 billion) from 590.5 billion won in the year-earlier period.

Net profit in the October-December period nearly tripled to 976.8 billion won from 346.4 billion won a year earlier, while revenue increased 5% to a record 16.9 trillion won, according to its regulatory filing on Jan. 27.

An improved product mix and increased average selling prices helped offset production losses caused by the union’s partial strikes for higher wages and weak auto sales amid an extended COVID-19 pandemic, it said.

For all of 2020, net profit fell 18% to 1.5 trillion won from 1.83 trillion won the previous year, while revenue climbed 1.8% on year to 59.17 trillion won. Full-year operating profit rose 2.8% to 2.07 trillion won.

AIM TO IMPROVE PROFITABILITY WITH PREMIUM SUVs, EVs

Kia Corp., which recently dropped Motors from its name in a move to break away from its traditional manufacturing-driven business model, said on Wednesday it aims to improve its profitability this year by launching new sport-utility vehicles and more electric cars.

As Kia shifts its focus from internal combustion vehicles to electric cars, it has pledged to launch seven new electric models by 2027 to gain a greater share of the global EV market.

Under the project name, CV, Kia plans to unveil its first dedicated EV model bearing the new logo in March, aiming to roll out the car in Korea and Europe in July and in the US market in December. All its new EVs, including sedans and SUVs, will sit on the automotive group’s Electric-Global Modular Platform (E-GMP).

The company said it has set its 2021 auto sales target at 2.92 million units, up 12.1% from last year.

It plans to pay 1,000 won a share in dividend for shareholders registered at the end of 2020.

Shares of Kia finished up 0.3% at 90,000 won on Wednesday, outperforming the broader market’s 0.6% fall.

On Tuesday, its sister firm Hyundai Motor Co. reported a 78% jump in its fourth-quarter net profit, driven by robust sales of its luxury Genesis models and high-end sport utility vehicles.

Write to Il-Gue Kim at Black0419@hankyung.com
In-Soo Nam edited this article.