(LEAD) Kia's Q3 net profit falls 9.6 pct on unfavorable foreign exchange movements

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By Kim Eun-jung

SEOUL, Oct. 30 (Yonhap) -- Kia Corp. said Friday its third-quarter net profit fell 9.6 percent from a year earlier due to unfavorable foreign exchange movements, despite robust operating profit helped by lower U.S. auto tariffs.

Net profit for the July-September period came to 1.28 trillion won (US$961.6 million), down from 1.42 trillion won a year earlier, South Korea's second-largest automaker said in a regulatory filing.

Operating profit rose 24.3 percent on-year to 1.81 trillion won, partly benefiting from a favorable base effect following a reduction in U.S. tariffs on automobiles from 25 percent to 15 percent.

However, the company said rising raw material costs and the prolonged conflict in the Middle East weighed on profitability, adding nearly 600 billion won in costs compared with the same period last year.

Sales rose 10.1 percent on-year to 31.59 trillion won in the third quarter, supported by a 7.9 percent increase in global wholesale vehicle sales to 847,355 units.

Overseas sales accounted for 83.4 percent of the total, while domestic sales made up the remaining 16.6 percent.

Kia's global market share rose to 4 percent in the first nine months of the year, up 0.4 percentage point a year earlier, supported by solid sales in major markets.

Retail sales of electrified vehicles, including electric vehicles (EVs) and hybrid electric vehicles (HEVs), surged 47 percent on-year to approximately 300,000 units in the third quarter, accounting for 36.2 percent of total sales.

The company attributed the growth to its strategy of tailoring its powertrain lineup to regional demand amid high global oil prices, with stronger EV demand in South Korea and Western Europe, and growing demand for hybrids in the United States.

In the fourth quarter, Kia plans to boost sales of higher-margin hybrid models in South Korea and the U.S. to improve profitability.

"Kia expects a swift recovery in profitability, backed by its strong automotive business, once external pressures, including rising raw material costs and instability in the Middle East, ease," Jung Sung-kook, a senior vice president, said during an earnings conference.

ejkim@yna.co.r
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