SEOUL -- Kia Motors Corp., South Korea's second-biggest carmaker, reported flat quarterly net profit on Friday as rising steel prices and weak local sales offset a jump in exports.
Global steel prices, up 14 percent in the first half, have gnawed at Kia's bottom line along with heavy marketing costs to give incentives to auto buyers in a sluggish domestic market.
Analysts, however, banked on better local sales for the second half as Kia, an affiliate of the country's top auto maker, Hyundai Motor Co., should benefit from next month's launch of a new model of compact sport utility vehicle.
Kia earned a net profit of 186.4 billion won ($159.6 million) for the three months ended June 30, unchanged from a year ago. Sales rose 14 percent to 3.9 trillion won.
Kia's quarterly profit came one day after Hyundai Motor reported an 11 percent drop in second-quarter profit, pinched by higher steel prices and slow domestic sales.
Like its domestic rivals, Kia has suffered a protracted slump in sales at home while enjoying solid demand in Europe and elsewhere.
Kia, which makes the SUV Sorento and compact Cerato, saw a 70 percent jump in exports for the second quarter to western Europe.
Kia and Hyundai broke ground in April on a 1.1 billion-euro ($1.33 billion) plant in Slovakia to expand their low-cost production base in Europe. Kia has 15 manufacturing and assembly operations in 12 countries and 30,000 employees.