Kia Posts Profits Despite Sales Decline

 

Kia Motors Corp. said Friday it posted a net profit in the first quarter, helped by a sharply weaker South Korean won and an increase in domestic sales.

Kia, South Korea’s second-largest automaker, recorded a net profit of 97.38 billion won ($72.5 million) in the three months ended March 31, it said in a regulatory filing. Kia reported a net loss of 24.84 billion won the same period last year.

Total sales fell 5.8 percent to 3.50 trillion won from 3.72 trillion the year before. The company sold 281,000 vehicles worldwide in the quarter, down 17.5 percent.

Kia is an affiliate of top South Korean automaker Hyundai Motor Co. Together they form the world’s fifth-largest automotive group.

Weakness in the won and sales of new models pushed Kia into the black, Lee Jae-rok, a company finance executive, said in a press release.

The won traded 32 percent lower against the dollar on average in the first quarter compared with the same period in 2008, according to Bank of Korea data. A weaker won can boost profits earned abroad when repatriated and can make South Korean products cheaper in overseas markets.

Domestic sales gained 6.4 percent from the year before as South Koreans purchased small models introduced in the second half of last year, including the Soul, Kia said.

Shares in Kia, which announced results during morning trading, fell 4.2 percent to close at 10,250 won.

Hyundai Motor said Thursday that net profit dived 42.7 percent in the first quarter as sales fell amid the global slump.

4/24/2009 7:10 AM SEOUL, South Korea (AP)