Kia reported better-than-expected second-quarter profit, surpassing analysts’ estimates.
Kia net income, not including minority interests increased 7.7% to 1.18 trillion won ($1.06 billion), from 1.1 trillion won in 2012, exceeding analysts’ estimates of 1.05 trillion won. Revenue was up 4.5% to 13.1 trillion won.
Sales in China increased 22% thanks to high demand for the K3 sedan, while the Sportage SUV rose dales by 1.5% in Europe. These gains offset the loss in South Korea and the US, the automaker’s largest market. Operating profit dropped 8.5% to 1.13 trillion won, beating analysts’ estimates of 1.01 trillion won.
“Kia exceeded expectations today, thanks to increasing sales in China,” said Lee Sang Hyun, an auto analyst at NH Investment & Securities Co. “Moving forward, things look good for the company, especially with its new model the Soul wagon scheduled to be unveiled in the second half.”
Kia increased its sales target for China this year from 500,000 units to 520,000 units, according to CFO Park Han Woo. Production in the region will be increased in 2014, as the automaker’s third plant here will start operations in March. Sales in South Korea dropped 4% and last month Kia announced it will boost production in the region to 620,000 units from 500,000 units at its Gwangju factory.