이 기사는 2022년 06월 13일 07:59 thebell 에 표출된 기사입니다.

South Korean credit rating agency Korea Investors Service has upgraded its outlook on Kia Corp, an affiliate of Hyundai Motor, from stable to positive, paving the way for the automaker to retake its AA+ rating.

Korea Investors Service has upgraded Kia's outlook from AA0 with a stable outlook to AA0 with a positive outlook, implying a possibility that the rating may be increased to AA+. This may happen in the first half of 2023 considering that a credit rating is adjusted between six to 12 months after the credit outlook revision. Korea Investors Service cut its credit rating on Kia from AA+ to AA0 in 2019.

The latest outlook revision has been made on Kia’s ability to generate profits. “Kia's performance has improved as car sales and the unit price rose mainly for profitable models,” Korea Investors Service said. “Its financial structure is expected to improve by maintaining its ability to earn profits.”

Kia posted record earnings last year. The automaker’s revenue increased 18.1% year-on-year to 69.9 trillion won in 2021 and operating profit jumped 145.1% to 5.01 trillion won on a consolidated basis. It posted operating profit of 1.6 trillion won in the first three months of this year, up 49.2% from a year earlier.

Its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA)/revenue was 11.5% and total borrowings/adjusted EBITDA was 1.1 times as of the end of March.

Amid easing chip shortage, Kia’s operation of its plants and global production are improving rapidly. Its sales in Western Europe and the U.S. are also showing signs of improvement. Kia’s green car sales nearly doubled in the U.S. and its first all-electric vehicle EV6 become the first South Korean car to be named the Car of the Year in the European Car of the Year awards.

The credit rating agency said Kia is expected to benefit from its improved business competitiveness and brand recognition when the supply normalizes.

If Kia’s credit rating is upgraded to AA+, it will be on par with its bigger affiliate Hyundai Motor. Korea Investors Service has maintained Hyundai Motor’s credit rating at AA+ with a stable outlook this time.

Credit rating agencies said the ratings of Hyundai Motor and Kia are not linked although Hyundai Motor’s rating change may have an impact on Kia’s rating.

“Even if Kia’s rating becomes on par with Hyundai Motor at AA+, it doesn’t mean that Kia is superior to Hyundai Motor because there are differences in status and financial capabilities between the two companies,” an industry source said. (Reporting by Ji-hye Lee)