SEOUL, January 28 (AJP) - Kia Corp., South Korea’s second-largest automaker, saw its fourth-quarter and full-year 2025 operating profit fall by around 30 percent as higher U.S. tariffs dented the bottom line despite record-high sales volumes and revenue.
In its earnings filing Tuesday, Kia disclosed consolidated operating profit for the October–December period at 1.84 trillion won ($1.3 billion), up 26 percent from the previous quarter but down 32.2 percent from a year earlier.
Quarterly revenue reached 28.09 trillion won, slipping 2.1 percent quarter on quarter but rising 3.5 percent from the same period last year, marking the company’s best for a fourth quarter.
The automaker’s operating margin narrowed to 6.6 percent in the quarter, while the full-year margin stood at around 8.0 percent.
Profitability was squeezed by a sharp rise in costs. The cost-of-sales ratio climbed to 81.7 percent from 78.8 percent a year earlier, dragging the gross margin down to 18.3 percent from 21.2 percent. Selling and administrative expenses also increased, further weighing on earnings.
For the full year, Kia posted operating profit of 9.08 trillion won, down 28.3 percent from 12.67 trillion won in 2024, even as annual revenue jumped 6.2 percent to a record 114.14 trillion won. Global vehicle sales reached an all-time high of 3.14 million units.
Korean-made vehicles, which had previously enjoyed near-zero duties under a bilateral free trade agreement, were hit with a uniform 25-percent “reciprocal” tariff from spring last year under the Trump administration.
Although a subsequent trade deal lowered the rate to 15 percent — in line with tariffs applied to European and Japanese vehicles and retroactive to November — Kia said inventories at its U.S. operations were subject to the 25-percent duty for about two months.
Weaker sales volumes trimmed operating profit by an additional 13.2 billion won. These impacts were partially offset by favorable foreign-exchange effects from a weaker won, which lifted profit by about 42.4 billion won, as well as pricing adjustments, an improved model mix and cost-cutting efforts.
Balance-sheet metrics improved despite softer earnings. Kia’s debt ratio fell 4.3 percentage points year on year to 61.8 percent, while net cash rose to 19.64 trillion won as borrowings declined. Equity increased by 5.35 trillion won to 61.19 trillion won. Return on equity, however, slipped to 12.8 percent, reflecting the earnings slowdown.
Kia shares closed down 2.48 percent at 149,700 won.
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