3rd quarter performance announcement conference call on the 25th
“Lambda 2 provisions are a quality issue, not safety”
4th quarter profit expected to be good due to preemptive provisioning
Monthly alpha profit expected to be KRW 1 trillion plus
Kia Motors‘ new logo is hanging on the exterior wall of Kia Motors’ headquarters building in Seocho-gu, Seoul. (Photo = Provided by Hyundai-Kia Motors) 2021.01.14. Newsis”/>
Kia announced on the 25th that it had built up provisions worth 631 billion won for preemptive quality control in the third quarter of this year. It is explained that the company will return to its monthly profit structure of 1 trillion won in the fourth quarter of this year, when such costs will no longer be incurred due to such preemptive one-time cost covering.
In the conference call announcing the third quarter performance held on this day, Kia said, “We have accumulated provisions of 631 billion won by extending the Lambda 2 engine warranty period,” and added, “The target number is 360,000 units, with the 2014-2017 model K7 and Sorento being the main models.”
Regarding the extension of the Lambda 2 engine warranty period, Kia said, “We concluded discussions with the U.S. National Highway Traffic Safety Administration in July,” and added, “The final agreement was made on a general issue of the engine, not safety-related.” The explanation is that the warranty period has been extended in accordance with this agreement.
Regarding this provision, Kia said, “We have accumulated a high amount that is considered very conservative compared to the current experience rate,” and “We do not expect to accumulate additional provisions.”
Kia predicted that it would maintain a monthly profit structure of 1 trillion won in the fourth quarter of this year, with no one-time cost impact.
Kia said, “We are predicting monthly revenue of 1 trillion won plus alpha in the fourth quarter.”
[서울=뉴시스]