SEOUL - Kia Motors Corp. surprised analysts by announcing that it expects to earn a profit of 140 billion won (about $116.4 million at current exchange rates) this year. If that happens, it would be the largest profit in the company's history.
After Kia was placed under the control of Hyundai Motor Co. last year, Kia's new management said it didn't expect a profit before 2001. Kia Motors lost 6.6 trillion won in 1998.
The forecast for a record profit this year was made possible in part by its creditors' decision to write off 7 trillion won of the company's debt.
Kia also said that it plans to go ahead this month with legal procedures to be released from court receivership status.
A Kia spokesman said the company expects to achieve its goal of 837,000 sales this year.
Merrill Lynch issued a buy recommendation for Kia stock in a July report. 'In our view, Kia is a turnaround story,' the report said. It cited a 'significant downsizing to 31.1 cars per employee in 1999, from 23.6 in 1996.'
Cost savings from combined purchasing and centralization of r&d activities with Hyundai also were cited by Merrill Lynch as key contributing factors in Kia's recovery.
Bloomberg News Service contributed to this report