SEOUL, April 22 (Yonhap) — Kia Corp., South Korea’s second-biggest carmaker, said Thursday its first-quarter net profit nearly tripled from a year earlier on a low base effect and strong sales of sports utility vehicles (SUVs), but the company is worried about the impact of global chip shortages on production.
Net profit in the January-March period stood at 1.03 billion won (US$926,4 million), up 289.2 percent from a year earlier, the automaker said in a regulatory briefing.
Operating profit soared 142.2 percent on-year to 1.07 trillion won in the first quarter, and sales rose 13.8 percent to 16.6 trillion won over the period, the company said.
The operating profit was 9.3 percent lower than the average estimate by local brokerages, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
Kia said recovery in demand following the COVID-19 pandemic and strong sales of high-margin SUVs in major markets propelled its sales growth, with recreational vehicles accounting for half of its sales.
In the second quarter, the automaker said it will focus on marketing for its new K8 sedan and its first all-electric EV 6 ahead of its launch in the second half of this year.
Kia expected an unfavorable business environment in the second quarter due to the global chip shortage, prolonged COVID-19 pandemic and rising raw material costs.
“The worsening global chip shortage is expected to disrupt production of some vehicles in the second quarter, but we will actively take measures to minimize its impact,” Kia said in a statement.
Kia said it will flexibly adjust the vehicle production plan, search for alternative components and preemptively secure inventory to minimize production cuts forced by the continued shortage of automotive chips.
Shares in Kia slipped 0.48 percent to 83,400 won on the Seoul bourse, underperforming the benchmark KOSPI’s 0.18 percent gain.