Kia Motors says strong won hit its bottom line in Q2
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Kia Motors said Friday that its second-quarter net profit fell 15 percent from a year earlier on a strong won and increased incentives to cut inventories.
Net profit for the three months that ended on June 30 fell to 331.8 billion won from 389.6 billion won a year earlier, the company said in a statement.
“The won rose sharply against the dollar. And the company spent more incentives in the U.S. market to reduce local inventories [of sedans],” the statement said.
The dollar fell to an average of 1,078.57 won in the second quarter from 1,129.43 won a year earlier, according to the Bank of Korea.
Operating profit declined 13 percent to 352.6 billion won in the June quarter from 404 billion won a year ago. Sales rose 3.5 percent to 14.06 trillion won from 13.58 trillion won during the same period.
Questions & Answers
Q.What was Kia Motors' net profit for the second quarter?
What was Kia Motors' net profit for the second quarter?
Kia Motors reported a net profit of 331.8 billion won for the three months ending June 30. This represents a 15% decrease compared to the 389.6 billion won recorded in the same period last year.
Q.What were the main reasons cited for the fall in profit?
What were the main reasons cited for the fall in profit?
The company attributed the profit decline primarily to a strong won against the dollar and increased incentives. More incentives were spent in the US market to help reduce local inventories of sedans.
Q.Did the company's sales also decrease in the second quarter?
Did the company's sales also decrease in the second quarter?
No, sales actually increased by 3.5% during the second quarter. Sales rose to 14.06 trillion won, up from 13.58 trillion won in the same period a year earlier, despite the fall in profit.
Q.By how much did the South Korean won strengthen against the dollar?
By how much did the South Korean won strengthen against the dollar?
The dollar fell to an average of 1,078.57 won in the second quarter, according to the Bank of Korea. This is a strengthening of the won from an average of 1,129.43 won a year earlier.