Kia, Hyundai’s sibling in the group and South Korea’s second-largest carmaker, posted fourth-quarter profit that missed estimates as a stronger won cut exports.
Kia joins its largest shareholder Hyundai in reporting profit that missed estimates as the won appreciated, eroded the companies’ competitiveness against Japanese makers in key markets such as the US. The companies, which share a chairman, are predicting their weakest combined sales growth in eight years as the stronger local currency saps overseas demand.
Operating profit climbed 61 % to 650.3 billion won ($604 million) from 404.2 billion won a year earlier, the Seoul-based company said today. That lagged behind the 789.8 billion-won average of 24 analyst estimates. Fourth-quarter net income climbed 29 percent to 949 billion won from 737.5 billion won a year earlier, surpassing the 909 billion-won average of 25 analyst estimates.
The won has gained 3.1 % against the dollar in the past six months, the best performer among Asian currencies. Versus the yen, the won advanced 23 % last year, curbing Kia’s and Hyundai’s competitiveness against Japanese automakers such as Toyota Motor Corp. in exporting to the US.
Kia dropped 1.1 % to close at 52,700 won in Seoul trading. The stock has lost 6.1 % this year, compared with a 3.5 % decline for the Kospi index.
by Aurel Niculescu
) - Friday, January 24th, 2014 - filed under Industry
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