Kia Corp.’s operating profit topped market expectations in the second quarter, hitting an all-time quarterly high thanks to buoyant sales of its lucrative sedans and leisure vehicles that helped more than offset production disruptions from automotive chip shortages and unfavorable exchange rates.

The South Korean automaker said on Thursday its second-quarter operating profit came to 1.49 trillion won ($1.28 billion), a whopping 10-fold increase from 145.2 billion won a year ago and 38.2 percent addition from a quarter ago. It is the highest quarterly figure that breaks its previous record of 1.28 trillion won tallied in the fourth quarter of 2014. It also beat market consensus of 1.37 trillion won.

Net income stood at 1.34 trillion won over the April-June period, 10 times higher on year and 29.7 percent higher on quarter on sales of 18.34 trillion won, up 61.3 percent from the same period of the previous year and 10.6 percent from the previous quarter.

Kia shares opened Friday 1.37 percent higher at 88,600 won but closed the day 1.14 percent lower at 86,400 won in Seoul trading.

The excellent quarterly performance was attributed to upbeat sales of higher-margin recreational models such as the Sorento SUV and Carnival minivan, as well as the New K8 launched in the first half, which helped elevate the average sale price, the company said. RV sales accounted for 56.5 percent of the total in the quarter, up by 2.8 percentage points from a year ago.

This helped the company’s operating margin improve to 8.06 percent in the second quarter, the highest level since 8.6 percent in the second quarter of 2013.

Kia sold a total of 754,117 cars at home and abroad in the second quarter, up 46.1 percent from a year ago. Overseas sales grew by 70.9 percent on year to 605,808 units but domestic sales fell by 8.2 percent to 148,309 units.

Kia’s car deliveries jumped especially in three key markets – Europe, the U.S. and India where car demand sharply rebounded from the same period of last year when the Covid-19 outbreaks compelled people refrain from spending. In the U.S., its market share hit an all-time high thanks to record high sales of its cars across the board. But its auto sales fell 28.7 percent in another key market China.

The company projected chip shortages would continue to disrupt production in some of its factories at home and abroad in the second half despite the anticipated strong demand, and it said it will go all-out to mitigate the risks with release of new cars including electric vehicles, upgraded models and aggressive marketing campaigns to improve its brand awareness in key markets.

By Seo Dong-cheol and Minu Kim

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