SEOUL -- Kia Motors Corp., South Korea's second-biggest automaker, said on Friday its quarterly earnings tumbled more than a quarter, hit by a stronger won currency and higher steel costs.
Kia, which controls 23 percent of the home market, has been badly hit by its exposure to Europe, where a crumbling euro has been eating into export sales. Kia ships up to 60 percent of its exports to Europe.
But its recent launch of a new Grand Carnival minivan as well as stable steel prices and the won have brightened Kia's second half outlook, analysts said.
Kia, an affiliate of top carmaker Hyundai Motor Co., earned a net profit of 148.3 billion won ($144.3 million) in the second quarter ended June 30, compared with a revised profit of 203.3 billion won a year ago and 193 billion in the first quarter.
It topped a consensus forecast of 107.7 billion won net profit. Operating profit tumbled 81 percent to 25 billion won from a profit of 132.3 billion won a year ago.
The won gained 15.3 percent versus the dollar in the year through the second quarter, although has eased around 3.4 percent from a March high. The euro lost 8.5 percent versus the won in the first half.
Kia's results came a day after Hyundai Motor reported a surprise rise in quarterly net profit, boosted by fewer bad loans and warranty liabilities. But Kia's bigger affiliate also saw a 36 percent fall in operating profit, hit by a firmer won eating into export sales.
Hyundai is aiming to become the world's top six auto maker by 2010 along with Kia Motors.
In Japan, Honda Motor Co. also recently posted a stronger-than-expected 6.5 percent rise in quarterly operating profit and lifted its full-year forecast on solid local and U.S. sales.
Asian carmakers are expanding sales to the United States, where giants General Motors and Ford Motor Co. last week reported a drop in earnings as their auto operations lost money on margin-eroding incentives.