SEOUL, April 24 (AJP) — South Korean carmaker Kia, like its sister company Hyundai Motor, suffered a double-digit decline in earnings in the first quarter despite record sales, as higher tariff costs on U.S. shipments and shipping disruptions linked to Gulf tensions weighed on profitability.
Operating profit fell 26.7 percent on year to 2.2 trillion won ($1.52 billion), reflecting an estimated 755 billion won increase in U.S.-related tariff costs compared to a year earlier, the company said Friday.
Global wholesale volumes edged up just 0.9 percent to around 780,000 units, pointing to limited volume growth behind the top-line expansion.
Operating margin fell to 7.5 percent from 10.7 percent a year earlier, as increased production and shipping costs eroded profitability. The cost of sales ratio rose to 80.3 percent from 78.3 percent, while selling and administrative expenses jumped 17.1 percent, underscoring mounting cost pressure.
Regional performance remained mixed. While India and Latin America posted strong growth of 11.6 percent and 34.6 percent, respectively, North America saw volumes decline 2.1 percent and the Middle East plunged 31.2 percent, reflecting the impact of the war.
Despite an overall 5.5 percent fall in car demand in the U.S., Kia’s sales rose 4.1 percent and its market share climbed to 5.6 percent, helped by hybrid and EV sales surging 73.5 percent and accounting for 19.3 percent of total sales.
Kia shares closed Friday at 153,400 won down 3.2 percent.
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