Kia Motors Q1 Net Profit Tumbles on Strong Won

SEOUL April 28, 2006; Reuters reported that Kia Motors Corp., South Korea's second-largest car maker, reported an 80 percent fall in quarterly profit on Friday as a firmer won currency slashed the value of overseas sales.

Kia, which controls 23 percent of South Korea's car market, earned 38.4 billion won ($40.65 million) in net profit in the first quarter to March 31, compared with 193 billion won a year ago.

The result was well below the 109.9 billion won profit forecast from seven analysts polled by Reuters.

A firmer won may keep up pressure on earnings at Kia, which sells more than 75 percent of its products abroad, but new models are expected to help the company improve earnings in upcoming quarters, analysts said.

Kia, an affiliate of Hyundai Motor, has been caught up in a deepening probe over a domestic cash-for-favors scandal that could threaten the group's global expansion plans.