K Car(381970) is plunging early in the session on news that it posted a quarterly operating loss for the first time since its listing in the second quarter of this year.
At 9:19 a.m. on the 18th, K Car was trading at 6,660 won on the Korea Exchange, down 1,100 won (14.18%) from the previous session.
K Car reported second-quarter revenue of 439.2 billion won and an operating loss of 33.6 billion won this year. Revenue fell 27.9% from a year earlier, and operating profit of 14.2 billion won in the previous quarter turned to a loss. Net profit also shifted to a net loss of 27.1 billion won in the second quarter from 10.2 billion won in the first quarter. This is K Car's first quarterly loss since its listing in 2021.
The impact of the Middle East war sharply curbed domestic and overseas demand for used cars. Weak consumer sentiment in Korea due to high oil prices and a strong dollar-won exchange rate, along with disruptions in Middle East export shipping from the closure of the Strait of Hormuz, reduced both domestic retail and auction sales.
Second-quarter unit sales were 31,120, down 19.1% from a year earlier. E-commerce sales were 13,469, down 14.7%, and offline sales were 9,393, down 24.5%. Auction volumes also fell 19.4% to 8,258.
Inventory burdens also dragged on profitability. K Car increased vehicle inventory by more than 1,000 units ahead of March, the peak season for used cars, but as demand weakened afterward, downward pressure on selling prices intensified. Retail margin per vehicle fell 18.2% to 1.39 million won in the second quarter this year from 1.7 million won a year earlier.
A "fresh start incentive" paid during the change of the largest shareholder from Hahn & Company to KG Group was also reflected as a one-off expense. As a result, second-quarter labor costs surged to 54.6 billion won from 30.3 billion won a year earlier.
K Car plans to continue profitability-focused vehicle purchases and inventory management in the third quarter while securing additional growth drivers through a consumer-to-consumer (C2C) used-car direct transaction business launched in May.