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186243
Fri, 06/03/2011 - 09:44
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Moody's upgrades Kia Motors' credit rating
By Kim Young-gyo
HONG KONG, June 3 (Yonhap) -- Moody's Investors Service said Friday it has upgraded the credit rating of South Korea's No. 2 automaker Kia Motors Corp., citing the company's continued robust growth.
The global credit rating agency awarded Kia a Baa2 rating, the ninth-highest on its 21-tier rating scale, one notch up from Baa3. It also gave the company a stable rating outlook.
Kia has outperformed its global peers, with global unit sales growing at a compound annual growth rate of 23 percent over the last two years and a further 20 percent on-year increase in the first quarter of this year, Moody's said.
Chris Park, a vice president and senior analyst at Moody's, said the upgrade resulted from "a continued improvement in the company's financial profile, which in turn was underpinned by its strengthened product line-up and brand equity."
The upgrade has made Kia's rating on a par with that of Hyundai Motor Corp., the larger affiliate of the South Korean automaker.
Moody's expected Kia's growth in the global market share will continue over the short to medium term, due to its strong product launch strategy and balanced geographical portfolio, including significant exposure to fast-growing emerging markets.
The pace of growth, however, will slow due to its profit-oriented strategy, it said.
Despite the negative impact of a potential appreciation of the Korean won, its robust sales growth and improvements in the product mix will enable the carmaker to reduce its debts gradually over the next couple of years.
Kia said last month its first-quarter earnings nearly doubled to a record high on the back of brisk domestic and overseas sales. Net profit reached 953 billion won (US$888 million) in the January-March period, compared with a profit of 499 billion won a year earlier.
By country, the United States remained the largest market for Kia Motors with 104,774 vehicles sold there in the January-March period. China, the world's largest and also fastest-growing market, was next with 95,451 vehicles sold.
HONG KONG, June 3 (Yonhap) -- Moody's Investors Service said Friday it has upgraded the credit rating of South Korea's No. 2 automaker Kia Motors Corp., citing the company's continued robust growth.
The global credit rating agency awarded Kia a Baa2 rating, the ninth-highest on its 21-tier rating scale, one notch up from Baa3. It also gave the company a stable rating outlook.
Kia has outperformed its global peers, with global unit sales growing at a compound annual growth rate of 23 percent over the last two years and a further 20 percent on-year increase in the first quarter of this year, Moody's said.
Chris Park, a vice president and senior analyst at Moody's, said the upgrade resulted from "a continued improvement in the company's financial profile, which in turn was underpinned by its strengthened product line-up and brand equity."
The upgrade has made Kia's rating on a par with that of Hyundai Motor Corp., the larger affiliate of the South Korean automaker.
Moody's expected Kia's growth in the global market share will continue over the short to medium term, due to its strong product launch strategy and balanced geographical portfolio, including significant exposure to fast-growing emerging markets.
The pace of growth, however, will slow due to its profit-oriented strategy, it said.
Despite the negative impact of a potential appreciation of the Korean won, its robust sales growth and improvements in the product mix will enable the carmaker to reduce its debts gradually over the next couple of years.
Kia said last month its first-quarter earnings nearly doubled to a record high on the back of brisk domestic and overseas sales. Net profit reached 953 billion won (US$888 million) in the January-March period, compared with a profit of 499 billion won a year earlier.
By country, the United States remained the largest market for Kia Motors with 104,774 vehicles sold there in the January-March period. China, the world's largest and also fastest-growing market, was next with 95,451 vehicles sold.
