Kia (000270) Q3 2024 earnings summary

Executive summary

• Sales revenue for the first nine months of 2024 increased 6.4% year-over-year to W80,300,635 million, with operating profit up 8.8% to W9,950,722 million and net profit up 12.2% to W8,033,587 million, despite a 1.9% decline in consolidated sales units.

• Green car sales (HEV, PHEV, BEV) increased 3.6% year-over-year, with strong HEV growth and new model launches offsetting supply constraints and EV demand slowdown.

• Global retail sales fell 2.2% year-over-year to 735,000 units in 3Q, with declines in Korea, U.S., and Western Europe, but growth in India and Asia-Pacific.

• The company maintained robust production with a 99.2% utilization rate, producing 2,111,581 vehicles out of a 2,129,000 capacity.

• Total assets increased to W87,535,259 million and equity attributable to owners rose to W52,263,935 million as of September 30, 2024.

Financial highlights

• Gross margin improved to 23.7% from 22.9% year-over-year; operating profit margin was 12.4% for the nine months.

• Cost of sales ratio decreased to 76.8% of revenue, while SG&A expenses rose to 12.3%.

• Cash and cash equivalents at period end: W14,087,060 million.

• R&D expenses totaled W2,146,614 million, 2.7% of sales.

• Basic EPS for the nine months was W20,457, compared to W18,069 for the same period last year.

Outlook and guidance

• Revised 2024 annual guidance: sales revenue W105–110 trillion, operating profit margin 12% or higher, both raised from initial guidance.

• Focus remains on expanding hybrid and EV sales, maintaining high ASP, and launching new models (e.g., Tasman pickup, Sportage PE, EV3, K8 PE/HEV, Carnival HEV).

• 4Q outlook includes supply increases for key models and new HEV launches to offset EV demand slowdown.

• Global demand faces uncertainty from high inflation, interest rates, and geopolitical risks, but the company aims to sustain profitability through flexible production and sales strategies.

• The company continues to invest in global expansion, including factory expansions in Slovakia and India, and the construction of the Global Business Center.