Kia Q3 financial report: Revenue declines slightly but still grows

Kia has reported third-quarter 2024 financial results, with revenue rising but global vehicle sales declining slightly. In the quarter, the company’s global sales were 763,693 vehicles, a year-on-year decrease of 1.9% due to the temporary suspension of production due to facility upgrades and product lineup adjustments. Despite these headwinds, Kia’s quarterly revenue rose 3.8% to 26.52 trillion won, driven by higher average selling prices (ASPs) and an increase in the share of recreational vehicles and electric vehicles in its product mix. Increase.

Revenue and margins remain strong

Operating profit in the third quarter was 2.88 trillion won, and operating profit margin was 10.9%, a level that has been maintained for eight consecutive quarters. Kia’s profitability was further supported by stable raw material costs, favorable exchange rates and a well-rounded product portfolio, which more than offset one-time provisions related to warranty extensions. After adjusting for these provisions, operating profit will reach 3.51 trillion won, with an operating profit margin of 13.2%.

Electric vehicle sales rise

The automaker also saw growth in sales of electric vehicles, a segment that has remained strong in its global markets. In the third quarter, Kia sold 155,000 electric vehicles, a year-on-year increase of 3.6%. The segment accounts for 21% of Kia’s total sales, driven by demand for hybrid models such as the Sportage Hybrid and Carnival Hybrid and the launch of the all-electric EV3 SUV. Hybrid vehicle sales increased 10% to 84,000 units, while electric vehicle sales increased 8.3% to 54,000 units.

Global market performance and supply challenges

Judging from market performance, Kia’s sales have increased in North America, India, the Middle East, and the Asia-Pacific region. However, overall sales outside South Korea edged down 0.8%, partly due to lower EV sales due to reduced subsidies in some regions and supply constraints on subcompact models in Europe. In South Korea, sales fell due to lower industry-wide demand and the temporary suspension of production at Kia’s AutoLand Hwaseong plant, which is currently preparing for the new Tasman pickup truck.

Riding on strong performance in the first three quarters of 2024, Kia raised its full-year financial targets. The company currently expects revenue to be between 105 and 110 trillion won, operating profit to be between 12.8 and 13.2 trillion won, and operating profit margin to exceed 12%. Following the earlier cancellation of 500 billion won in shares, Kia also confirmed plans to cancel the remaining 50% of its treasury shares by the end of the year to increase shareholder value.