Kia Motors announces 2020 Q1 business results
Q1 global vehicle sales totaled 648,685 units, down 1.9% Y/y
Q1 sales revenue at KRW 14.57 trillion, up 17.1% Y/y on favorable exchange rates and improved product mix Q1 operating profit at KRW 444.5 billion, down 25.2% Y/y Q1 net profit decreased 59% Y/y to KRW 266 billion Company sees deteriorating business environment, weaker earnings momentum from Q2 amid spread of COVID-19
Kia Motors Corporation today announced its first-quarter business results for 2020, reporting a 1.9 percent year-on-year decrease in quarterly global vehicle sales.
The company sold a total of 648,685 vehicles on a wholesale basis in the January-March period, compared with 661,355 units a year earlier, as demand in Korea helped mitigate negative impact from the spread of COVID-19 in markets such as China and Europe. Sales in Korea increased to 116,739 units, up 1.1 percent year over year, while sales outside Korea slid 2.6 percent to 531,946 units.
Kia Motors recorded quarterly sales revenue of KRW 14.57 trillion, 17.1 percent higher than the KRW 12.44 trillion reported for the same period in 2019. Favorable exchange rates, improved product mix as well as strong performance of key models such as Telluride and Seltos SUVs contributed to higher revenue.
Operating profit in the first quarter dropped 25.2 percent year-on-year to KRW 444.5 billion, compared with KRW 594.1 billion a year earlier, during which time a one-off item helped boost profits.
Quarterly net profit (including minority interests) declined 59 percent from the same period in 2019 to KRW 266 billion as earnings contributions from affiliated companies contracted while the end-quarter fluctuation in KRW/USD exchange rate also adversely impacted on the net profit.
The company anticipates that it is likely to face weakening profitability from the second quarter as the global spread of COVID-19 would take full effect to its business environment around the world, leading to greater uncertainty to the global economy and consumer demand in automobiles. Suspension in production facilities and halts to some dealership operations would adversely affect vehicle supplies, too.
To flexibly cope with the uncertain business environment, Kia Motors plans to enhance its product competitiveness with new model line-up. The company will focus its efforts on sales of SUVs, notably Telluride, Seltos and recently launched all-new Sorento.
Kia will introduce customer-centric marketing and promotion activities tailored to each market, reflecting shifting customer needs in the era of pandemic. The company also plans to introduce an all-new compact SUV to the Indian market in the third quarter to further boost sales momentum.
Despite the tough business environment, Kia Motors will continue to focus on realizing the mid- to long-term strategy of ‘Plan S’, under which Kia aims to proactively introduce 11 battery electric models and increase operating profit margin to 6 percent by 2025.
Kia Motors Corporation 2020 Q1 Business Results
2020 Q1 2019 Q1
Sales 648,685 661,355
Korea 116,739 115,465
Rest of The World 531,946 545,890
Revenue 14, 566.9 12,444.4
Operating Profit 444.5 594.1
Net profit 266.0 649.1
- Revenue / Operating Profit / Net Profit: KRW billion
- Net Profit includes non-controlling interest
A. The above results are tentative consolidated business results under “Korean International Financial Reporting Standards (K-IFRS)”
B. The above results are preliminary and unaudited. Figures are subject to change after official audit.
C. The above sales volumes are based on wholesales.
D. For further information, please refer to the company website (http://www.kia.com/worldwide/main.do)
- KIA also photo