Due to stronger sales and equity gains from affiliated companies, Kia Motors was able to quadruple its net profit in the first quarter. In a regulatory filing, Kia disclosed that it earned 398.6 billion won ($358 million) in the three months ended March 31. For the same period last year, Kia reported a net profit of 97.4 billion won.
Kia, which makes the Forte small sedan and Sorento compact crossover SUV, said that sales for the quarter increased by 39% to 4.86 trillion won from 3.5 trillion won a year earlier. Kia and Hyundai Motor Co. form the world's fifth-largest automotive group.
With sales of 474,625 vehicles, global sales volume rose 69% when compared with 281,000 last year. In a press release, Kia finance chief Lee Jae-rok said that first-quarter results improved due to an increase in sales volume and the effect from new models.
In addition, China sales increased by 152%. Lee revealed that the uncertainty of the exchange rate was a concern. The South Korean won has been trading at 19-month highs against the dollar and Kia claims that the dollar dropped 18% in the first quarter from the year before.
A stronger won could lower profits that South Korean companies earn overseas when they are repatriated back home. This could also make their products more expensive in foreign markets.
Kia said that its bottom line was also strengthened by a drop in net interest expense because of a decrease in debt and financing costs as well as a narrower foreign exchange loss. [via autonews - sub. required]