Hello, this is Sangya Yoon, Head of Investor Relations at Kia. I will begin with business results for the fourth quarter of fiscal year 2025.

I'll commence with the sales summary, followed by the consolidated income statement, revenue and earnings analysis, the consolidated balance sheet, and finally, Kia's business plan for 2026. First, we will begin with the global retail sales performance.

In Q4 2025, global industry demand declined by 1.6% year-on-year due to mounting pressure on consumer purchasing power in the US market following the expiration of IRA subsidies at the end of September and rising vehicle prices, and budget constraints on the trade-in policy in certain local regions in China. Kia's global retail sales witnessed a 1.6% growth year-over-year led by higher sales centered around the Sportage HEV and Carnival HEV in the US, and increased sales led by the Sonet in India following the goods and services tax rate cuts, lifting our global market share by 0.1 percentage point to 3.3%.

By market, domestic sales dropped by 5.9% year-over-year, reflecting deferred year-end demand due to the extension of the individual consumption tax cut. In the US market, in response to changing market conditions such as tariffs, the expiration of EV subsidies, and easing environmental regulations, we leveraged our flexible production system and focused sales efforts more on ICE and HEV models than on EVs.

As a result, despite an overall decline in market demand, our sales increased by 1.7% year-on-year, resulting in our market share expanding to 5.3%. In the Western European market, despite continued strong sales of the EV3, fourth quarter sales were somewhat subdued due to the impact of the discontinuation of the Ceed and the aging of the existing ICE lineup, including the Sportage.

However, we expect sales to recover in 2026 driven by the full-scale contribution of newly launched models such as the EV4 and EV5 released in the fourth quarter. In the Indian market, the September 22nd goods and services tax rate cuts drove a sharp surge in A-segment SUV demand.

Benefiting from these tax incentives, our Sonet and Syros lifted sales 41% year-on-year and took our market share to 5.7%. Major emerging markets such as Central and South America and CIS markets recorded sales growth driven by increased supply from expanded export volumes from Chinese plants by the start of mass production at the Kazakhstan plant in October and increased CKD volumes in Uzbekistan.

Next is our electrified vehicle sales summary. In Q4 2025, electrified vehicle sales increased by 13.2% year-over-year to 186k units, driven by Kia's powertrain strategies aligned with shifts in demand in each market amid strong demand for HEVs in the US market and EVs in Western Europe.

As a result, the share of electrified vehicles in our global sales expanded by 2.4 percentage points from 21.5% in Q4 2024 to 23.9% in Q4 2025, and the sales mix for HEVs and EVs accounted for 15.6% and 7% respectively. HEV models continue to lead the growth of our electrified vehicle sales driven by strong demand in the US, with global sales of the Sportage HEV and Carnival HEV increasing by approximately 16k units and 5k units respectively.

Consequently, Kia's market share in the US HEV segment nearly doubled, expanding from 4.2% on a full-year basis in 2024 to 8.2% in the fourth quarter of 2025. In the EV segment, continued strong sales in Western Europe, together with introduction of the EV4 and EV5 in the fourth quarter, contributed to a 0.3 percentage point increase in Kia's EV market share in Europe, from 3.2% for full year 2024 to 3.5% as of Q4 2025.

The following is the regional wholesales performance. In Q4 2025, Kia's wholesales decreased 0.9% year-over-year to 763k units.

Looking at the key regions, North America saw a 2.5% growth year-on-year to 258k units owing to expanded shipments of the Carnival and Sportage HEV based on robust HEV-led demand and stronger SUV-focused wholesale volumes. In Europe, despite continued strong sales of the EV3, sales volume declined by 10.2% year-over-year to 119k units due to the discontinuation of the Ceed, production adjustments for the new EV2 launch at our Slovakia plant, and heightened competition.

In India, sales grew 40.9% year-on-year to 74k units driven by the impact of the GST rate cuts and strong demand for the Sonet, which benefited from such. Finally, in the rest of the world, such as the CIS region, sales increased nearly 30% year-on-year owing to increased sales of the Sportage produced at the Kazakhstan plant and the Sonet produced at the Uzbekistan plant.

Next is the consolidated income statement. In Q4 2025, revenue rose 3.5% year-on-year to 28.088 trillion won as higher ASP resulting from continued price effects and favorable FX effects outweighed the decline in consolidated sales volume.

Operating profit reported 1.843 trillion won, down 32.2% year-on-year, as the benefit from the retroactive application of the 15% Korea-US tariff effective November 1st was offset by the temporary burden of a 25% tariff on US inventory through October and November and higher incentives in overseas markets. Pretax profit stood at 2.111 trillion won and net profit at 1.471 trillion won, down 13.6% and 15.5% year-on-year respectively.

Next, operating profit analysis. Breaking down the revolution of operating profit by factor: first, the impact of US tariffs continued into the fourth quarter, reducing profit by 1.022 trillion won.

Increased spending for competition in the North American and European markets resulted in a 342 billion won YoY increase in consolidated incentives, reducing earnings. In addition, vehicle sales declined by more than 8,000 units YoY, resulting in a 132 billion won decrease in earnings.

However, the TP mix turned positive in the fourth quarter after having been a negative factor until the third quarter, reflecting an improvement in our fundamentals. Even amid a challenging business environment, Kia improved profit by 90 billion won through price effects driven by enhanced product value, and efforts to mitigate the impact of US tariffs resulted in approximately 108 billion won in cost savings.

Lastly, the continued favorable impact of the Korean won-USD exchange rate increased earnings by 424 billion won, and as a result, operating profit for the fourth quarter of 2025 amounted to 1.843 trillion won, down 874 billion won YoY. Next, revenue analysis.

First, based on the regional sales share data on the left, consolidated revenue increased by 3.5% YoY. In North America, revenue increased on the back of higher wholesale volumes and higher ASP centered on HEVs and SUVs, lifting its share by 1.3 percentage points from 43.3% in Q4 last year to 44.6% in Q4 2025.

In terms of domestic sales, despite a 2.1% increase in ASP, revenue declined by nearly 6%, leading to a 1.2 percentage point decrease in its share YoY to 17.6%. Despite a decline in sales compared to the fourth quarter of last year, Europe's revenue share remained at a similar level to the previous year, supported by a relatively higher share of EV sales and a favorable won-euro exchange rate.

India's revenue share expanded to approximately 5% driven by sales growth of over 40%. Now moving on to the ASP improvements on the right.

The global ASP for Q4 2025 increased by 4.7% YoY to 39.1 million won, driven by the expanded HEV, EV sales centered on advanced markets in the US and Europe along with positive exchange rate effects. Domestic ASP also increased by 2.1% YoY to 35.1 million won, continuing its growth trend.

Next, cost of sales and SG&A. Despite revenue expansion driven by favorable foreign exchange rate effects, the cost of sales ratio for Q4 2025 rose 2.9 percentage points YoY to 81.7% due to the previously mentioned impact of US tariffs amounting to 1.022 trillion won.

Without the tariff impact, however, the Q4 cost of sales ratio is estimated to have slightly improved YoY to 78.1%. The SG&A ratio for Q4 rose 0.6 percentage point YoY to 11.8%, mainly driven by increased volatility in the Korean won-US dollar exchange rate at quarter-end and the reflection of quality costs, which led to a 0.8 percentage point YoY increase in the sales warranty expense ratio.

Next, non-operating income. First, equity method results posted a loss of 72 billion won in the fourth quarter of 2025 following a loss in the same period last year.

However, results improved by 79 billion won YoY driven by absence of one-off impairment losses recorded in the fourth quarter of last year and improved performances at affiliates. Financial and other non-operating income improved by 462 billion won YoY to 341 billion won, reflecting FX gains driven by quarter-end exchange rate movements as well as improved gains on disposals of tangible assets.

As a result, net non-operating income expense for Q4 2025 increased by 541 billion won YoY to 268 billion won. Next, the balance sheet.

As of year-end 2025, total assets amounted to 98.979 trillion won, an increase of 6.223 trillion won compared to year-end 2024. The key drivers behind the asset expansion were increases in tangible and intangible assets, inventory assets, and equity method investments.

Total liabilities at year-end 2025 amounted to 37.789 trillion won, an increase of 879 billion won compared to the year-end of the previous year. Despite a reduction in borrowings of 890.2 billion won, total liabilities increased compared to year-end 2024, mainly due to increases in accounts payable and warranty provision.

Total equity stood at 61.19 trillion won, an increase of 5.35 trillion won compared to the year-end of the previous year, and the debt ratio improved by 4.3 percentage points YoY to 61.8%. Lastly, our business plan for 2026.

For 2026, Kia targets wholesale sales of 3.35 million units, representing an increase of 214,000 units YoY or 6.8% growth. Retail sales are also expected to grow 6.8% YoY in line with wholesale growth.

In the US, we plan to drive sales growth centered on SUV and HEVs supported by full model changes of our core models, the Telluride and Seltos ICE, along with the addition of new HEV variants for both models. In Europe, with the early-year launch of the EV2, we will complete our mass EV full lineup spanning EV3, EV4, and EV5, and focus on a full recovery in sales, further strengthening our EV leadership.

In India, we will continue to strengthen our market leadership by targeting premium SUV customers through the new Seltos. For 2026, Kia's sales revenue target is 122.3 trillion won, representing a 7.2% growth YoY.

Operating profit is targeted at 10.2 trillion won, an increase of 1.1 trillion won YoY, with an operating profit margin of 8.3%. In 2026, despite the application of a 15% US tariff and an expected increase in incentives amid intensifying competition, Kia will pursue robust top-line growth driven by ambitious volume growth targets and ASP improvements supported by increased HEV and EV sales, while continuing to enhance profitability through multifaceted cost reduction efforts.

More details on our 2026 business plan will be provided at the CEO Investor Day scheduled for early April. This concludes the earnings results for the fourth quarter of fiscal year 2025.

Thank you. Next, CFO, Senior Vice President Seung-joon Kim will deliver a review on Kia's earnings for the fourth quarter 2025 and business outlook for 2026.

Hello, I am Seung-joon Kim from Kia. We'll talk about the fourth quarter and year, the performance, and also the business plan for 2026, and also the shareholder returns.

We will divide those three buckets and explain each and every one of them. First, about the fourth quarter and 2025 performance.

Here in Q3, as we have explained during the performance results, we have went on a bottoming out, but now we are on a recovery stage. However, as Head of IR Yun Kang-ryul has said, the tariff being impacted, affected in 15% was in November 1st.

Due to the inventory in October and November, it was after December that the 15% was clearly shown. In Q4, compared to what we have thought, the reason why we didn't go as much as we expected was because the Q4 sales, as we have explained, in domestic and Europe compared to the year before, we were a little bit low, but in domestic, due to the individual consumption tax rate extension, there was an impact.

Also, there was an increased, intensified competition of our competitors, and the incentive strategy impacted in Kia also. For EV transition, we have the later full EV launch, and that impact did not show in the fourth quarter 2025.

That impact will show in 2026. That's why we have reflected in our business plan for 2026.

Our trough was in Q3 2025, but we have turned around and are in recovery stage for Q4 2025. In 2026, we expect our earnings to normalize.

I don't know if normalize is the term to use, but from Q1 2026, we believe that we'll be able to show better performance regarding this. In relation to our business plan for 2026, we will explain.

Our 2026 business plan: we do not think that the market conditions will be much different from 2025. However, Kia believes that there will be about 6.8% or up to 7% growth.

We can divide it into Europe and the United States. In the United States, first time in seven years, the Telluride model has been newly released, and we have competitiveness in that model.

Also, there's the hybrid model that we have scheduled for release. Therefore, we believe that it will play the role as a cash cow.

From fourth quarter of 2025, Carnival Hybrid is also increasing in our supply, and also it will impact in our sales globally in 2026. Also, we have the Seltos that released recently not only in the US, but the Seltos domestically and in India and all over the world, from profitability perspective, is a big contributor to Kia's growth.

However, in Europe, in 2025, we were lacking in some extent, but in 2026 compared to 2025, we believe that we'll be able to achieve 10% growth. The reason is because we did launch the EVs in 2025, but they were usually at the end of the year.

In 2026, we believe that we can sell in full. At the beginning of the year, we have EV2, which is a low-cost model that will be released.

Therefore, according to the EV transition period, we will be able to supply accordingly. Also for the Ceed, the ICE has been discontinued.

As the K4 that was produced in Mexico was being sold in Europe, the ICE model and EV model balance was being met, and we believe that that will be able to drive growth. According to this, the electrified vehicle EV new cars increasing will be able to impact our revenue growth in 2026.

Also the earnings compared to the year before, we'll be able to see a significant growth. It may seem aggressive growth or conservative growth, but we believe that in sales, we will be able to achieve profitability growth.

As I said, the Telluride and the cash cow models have been released. Backed by these models, we will continue on enhancing our product value, and also our financial stability will also be increased.

We will reduce our debts and also have our cash increase. That will be our 2026 business plan.

Also, I want to move on to our shareholder return policy. On 2025, we mentioned that we would achieve TSR of 35% for three consecutive years.

Last year, there was the tariff impact partially, but our fundamental policy towards our shareholders and our promises to our shareholders should be met regardless of these external headwinds. Therefore, we are going to keep to our original promise that we have already made.

Whatever the situation may be, in Kia, we are going to show increasing sales. We believe that that is right, since our shareholders have shared our burden and supported us.

Therefore, we will increase the dividend per share from 6,500 to 6,800. Therefore, the TSR is going to be kept at 35%.

Through our efforts, shareholders and investors may be able to see Kia as a credible company. Once again, I like to stress that we are going to keep to our promise.

If our cash increases, then we will make reinvestments internally, and we will also provide some of that free cash balance to our shareholders as well. We will make reasonable decisions.

Thank you very much.

Next, we will begin the Q&A session. Please follow the instructions from the operator.

Hello, I am Eun-young Lim from Samsung Securities. I have two questions.

The first question is on the tariffs. You have explained about the tariffs, but in the morning there was the Hyundai Mobis earnings results that was announced to the public, and they have said that all of the tariff impact in the manufacturing parts have all been recovered.

When you have announced your impact of the tariffs, do you include the numbers of giving back the cost of the parts included in your statistics? Regarding the 3.75%, does it also include the duty drawbacks of the parts in the tariffs?

The second question is regarding the CAPEX. HMG has announced about the investments in robotics and also physical AI, and although Kia's cash flow is very good at the moment, they cannot help but the investments with this.

This year, what are your plans for CAPEX, and also will there need to be additional financing for this?

First, regarding the tariffs, I think that the cash basis and accrual basis is be different, but if we look at the tariffs that are impacting the OEMs and the parts, it can be divided into three parts. First is the OEM that pays for the tariffs when they export to the country, and also second is for the parts tariffs, and this could be divided into two parts as well, for the key parts as well as the general parts tariff.

Regarding the MSRP, we have the 3.75% refund provision that we have, but that is already been burdened, and so it does not reflect additionally into our income statement. In regards to our parts and OEMs, there will be impacts of only the general parts that have been not been refunded yet, and so the two that it will be actually be burdened by the OEMs would be the OEM's exports to the United States, and also the general parts that will be also be burdened.

Also, for the general parts, there are exports that we do directly ourselves, which we take the burden of, and also there's the exports that are done by the vendors. It has also been 100% reflected in our pricing.

Therefore, we do not believe that there will be any changes in the acknowledgment in our accounting unless there's any changes to the tariff amount. If we consider the 2025 tariff total burden, it was 2.9 trillion won, and also, if we consider in mind that the US volumes will go up this year, we believe that there will be a full-year reflection of the tariffs that has been burdened in May, which is about 3.5 trillion won, and therefore, 80% of the tariff is burdened by OEMs and 20% will be the general parts tariff that will be refunded.

Because it has been 100% be reflected, we do not think that there will be any confusion now going forward. In regards to the exports from Mexico and the tariffs from Mexico, we believe that we have to wait until Q1 in order to see how much refunds will need to be done.

After the Q1 is over, we'll be able to know a little bit better. Second question regarding CAPEX: adjustments will be needed, but based on rolling basis in the mid- to long-term calculation, based on the mid- to long-term in 2025, in 2025, we have our calculations set as 5.7 trillion won, for 2026, 5.5 trillion won, and 2025 2027, 5 trillion won.

Based on our top-line growth, we have our 2025 set as 5.1%, 2026 4.4%, and also 2027 3.5%. Although our group has announced our plans to invest in autonomous vehicles and also AI, additional and additional investments may be needed, however, even if they are reflected, we believe that we have the fundamentals very solid in place that we are able to take care of that CAPEX increase.

Regarding the cash flow as well, as our Senior Vice President has announced, we have increased our generational business capabilities. Therefore, we believe that we will be able to go into the extent that we can take care of the increase in the CAPEX.

Next question, please.

Hello, I am Young-kwan Moon from Shinhan Securities. Thank you for giving me the opportunity to ask this question.

I'd like to first of all ask about the 2026 sales target. It seems like there's a launch of EV and Seltos, and in regions like Europe, you're targeting for 11%, in APAC, you're targeting for 13% sales growth, and that is seemingly above the industry average.

You're targeting to go above the industry. However, when we look at these regions, there has been very aggressive entrance of the Chinese OEMs recently.

In the fourth quarter, I'd also like to ask about how much the incentives has played a factor, because other than the US, it's very difficult to track the incentives that is going on. I'd like to ask how the fourth quarter incentives has differentiated from the year before on a YoY basis other than the US.

My two questions were regarding the 2026 sales target as well as the incentives and also how much the incentives will be impacting the sales target of 2026.

Thank you very much. Regarding the question on the Chinese OEMs, yes, you have seen correctly.

The competition is intensifying from Chinese OEMs, and the price difference between us and Chinese OEMs is quite large. However, we're not thinking of offsetting all of their impact through giving more incentives and through price transfers.

Compared to 2024, in 2025, to put it roughly, per unit, the incentives increased by 10%, which was around 200k won. In 2026, when we set the business plan, we also set it as a similar rate, the incentive increase at a similar rate to last year.

In Europe, we also have to think about the fact that there's not only Chinese OEMs in the competition; there's the European OEMs that are very aggressive in their sales promotion. Therefore, we need to deal with the European OEMs as well in that market.

To increase our sales, yes, we have to increase our incentive ratio. However, when thinking about the direct impact that incentives has had on the actual sales units, it's very difficult to say, especially when we think about countries like the US and the regions like Europe and India.

Especially for India, there's not been that big of a change in incentives, and we've tried to rather take the new model launch effect with the Seltos, and we have targeted aggressive sales volume increase based on that rather than incentives. In the Europe, yes, incentives has played a big part in the volume increase of around more than 10%.

You've asked regarding the different situations of different regions when we look at the 2026 BP. Now, I want to mention that the market environment is very different region by region.

If you look at the very big numbers, then yes, we will see that the volume will actually increase from 3.14 to 3.15 million. However, we have to just see that the characteristics are different by emerging market and advanced markets.

The share would be emerging markets half and advanced markets half. The situation is especially very different from Europe and the US.

When we first look at the US, the EV subsidy has ended and the regulatory framework has also changed very much. Therefore, we will be focusing on increasing the sales of ICE and HEVs more and decreasing the ratio of EVs.

When we look at the very big picture, in terms of our product, we will be focusing on increasing the Telluride from 120k to 180k, which is around 50% growth, and also we will have the new lineup of the Seltos. Also, we will be targeting for a YoY 90% increase when it comes to HEVs in the US, there will be an increase of 120k going to 250k, that is the business plan.

Basically, in the US, in a nutshell, we will be focusing on our new car as well as the transition to hybrid-centered sales. Now, in the EU, of course EVs are going to take a center, front and center.

In the fourth quarter, we have for the very first time set the milestone of EV sales outpacing that of gasoline vehicle sales, and we believe that this trend will continue on forward. In the EU, the success of EV lies in how we can really take the lost volume of ICEs and transition that to the EV portfolio.

That will be the most important factor for us to gain the upper hand. In 2024, we did post a negative number.

However, that was because we were not able to transition the demand from ICE to EVs fully. Now that we have the full lineup of EV2 to EV5, and we also have the PV5 as well as Seltos, we believe that in Europe, we do have the strength to now transition away from ICE and take all of that demand into EVs.

For Europe, the plan is 11%, but the thing is the numbers may be similar, but the market characteristics is very different when we look at the US and Europe. In Europe, we're targeting for 80% growth rate in terms of EVs.

Now, in emerging markets, the competition is very high from Chinese OEMs, and in A, B-segment, we have the Sonet and the Seltos, and these are very strong SUV segments that we can lead with. Also, when it comes to the pricing, we are going to try to expand the production in the Chinese plant to reduce the cost of sales, and also we will be making use of the regional hubs in Asia-Pacific like Malaysia, and also increasing the ratio of CKDs.

Therefore, we will be using our product lineup as well as the regional hubs to target that area and to reduce cost of sales specifically. We're especially thinking of going more aggressive in Asia-Pacific in terms of our expansion, and in CIS, we also have the production base of Kazakhstan and Uzbekistan.

Therefore, when we look at the numbers, in the US, it's 4 to 5%, EU is more than 10%, and for other emerging markets, we believe that we will be able to achieve a high single-digit growth rate.

Next question, please.

The following question will be presented by Joon-sung Kim from Meritz Securities. Please go ahead with your question.

Hello, I am Joon-sung Kim from Meritz Securities. I have two questions.

The first question is regarding the earnings from the United States region. The United States region earnings has a big impact on our performance, and this year you probably have scheduled increase for sales.

I would like to know the details about the pricing and the incentives and the tariff impact on the earnings, and compared to the year before YoY, how will it be? If we look at the tariffs itself, for 8 months, there was the implementation of the 25% tariffs, and for 12 months, there will probably be the impact of 15% tariffs.

Will the cost of tariffs go down or be maintained or go up YoY? The second question is regarding the robotics and the autonomous vehicle-related features that HMG Group has announced recently.

There is a lot of people that are expecting a lot regards to the autonomous vehicle technology and robotics in the HMG Group, and so there will also be the demos and Atlas and a lot of test cars that will be in place and a lot of events. Are there any events that you can explain at the moment to the public, and also, what is the difference between HMG and Kia's perspective on these features and robotics?

Although this is the earnings results announcement call, regarding the CES, recently there was events that happened, and so we would like to know if there's any other events that will be happening soon.

Regards to

the earnings in the United States region, in Kia, the NA region holds a big part in our earnings. In 2025 as well, but in 2026, we expect the same thing to be true, and the basis for this is because of the sales volume increase.

Also, we have our Telluride, which is a high-profit model that will be released in the United States, which we have the volume set as reaching from 120k to increase to 180k. It's not regarding just the NA region, but Kia in our good times had reflected the increase in the cost of sales reflected in the pricing.

With the intensified competition with other OEMs like Chinese OEMs, we cannot reflect all of our costs into our pricing. Therefore, we are putting in a lot of efforts to secure our cost competitiveness.

I have emphasized this several times, but Kia has put in a lot of efforts with a desperate heart in order to reduce our fixed costs as well as reduce our cost in general. It's not just the NA region, but Kia as a total, in order to secure our profitability and maintain our profitability, have done our best in order to reduce our cost and fixed costs.

We believe that the earnings in NA region will be maintained.

As

the CES, we take turns during the announcement, and it was HMC's announcement this time. In the group perspective, autonomous vehicle technology and robotics is a strategic asset and a future industry, and it is a common investment that we are putting in together as well as a common development and a common project that we are engaging in together.

Through the Robotics LAB and diverse arenas, it's like the E-GMP is our common asset, we have the autonomous vehicle technology as well as robotics as our common asset as well. Regarding the CES, we have been able to show our big picture in our robotics, and at the end of the year, we have the demonstration in place, and also, we are going towards the mass production POCs and also the industrial mass production as well.

Rather than showing this and our plans on a one-off event basis, I think that there will be a better place for us to show you the progress on the road map through a structured manner. If we have plans in order to have this event in place after our preparation, we will be able to let you know.

Also, it's the same for autonomous vehicle technology. Our big plan is to have the SDV launch in 2027, and also have the L2++ stage of autonomous vehicle technology after initial launch, and also have our L4 autonomous vehicle technology developed with Motional.

This year, we have our launching as well. Therefore, after our preparation is over, I think that we are going to go to the stage of mass production development, and our leadership is looking into ways to accelerate this, and we have assignment in place for this as well.

We will be able to have a structured event where we can regularly tell our audiences about our plans and our big picture.

Next question, please.

The following question will be presented by Gi-yeon Kim from Daishin Securities. Please go ahead with your question.

Hello, I am Gi-yeon Kim from Daishin Securities. Thank you very much for this opportunity to ask the question.

I have two questions for you. The first is regarding the recent DRAM price increases.

I'm talking about semiconductors. Is this going to impact our cost of sales?

It seems like there's a lot of talk about this overseas, I'm wondering if there has been any long-term contracts in place regarding the DRAMs and how the volume is going to be planned for the future. Second is regarding the conversion cost.

In the fourth quarter, it has seemed to go up. Is there a special reason for this?

Regarding the very first question, the semiconductors that go into automobiles are different from DRAMs, we are not impacted right now. It's difficult to say if our cost of sales will be impacted going forward.

However, what's more important for us is basically the price of platinum and rhodium as well as palladium that goes up. That is what impacts us even more.

We have experienced a semiconductor shortage in the past, and that was a very difficult time for us. Of course, we do have long-term contracts in place to prepare ourselves, so that is not a big risk that we think.

Regarding the increase in warranty provision, there were a lot of new model launches in 2025, and therefore, when there's a new model launch in the beginning, we need a bigger provision. Also, we saw increased sales in EVs, and EVs do need more warranty provision than ICE.

That is why there was a YoY increase. When we look at the comparison with the third quarter, you can see that the ratio has actually gone down.

I want to say that this difference in the ratio is because of the new model launches as well as just organic differences in the cycle. Also, I would like to add on about the question regarding semiconductors.

When we actually sign the contracts regarding semiconductor procurement, we actually do individual contracts for different models. It is not like for semiconductors, we have a yearly procurement repricing contract all together.

Therefore, of course, these factors are forecasted, and that is included in our contracts.

Next question, please.

The following question will be presented by Shin Yoon-chul from Kiwoom Securities. Please go ahead with your question.

Hello, I am Shin Yoon-chul from Kiwoom Securities. Thank you for the opportunity to ask the question.

I have a question on the net cash. About 19.6 trillion has been announced, but you have also announced that in 2026, with the cash generation capabilities that you have from Kia's side, you'll be able to have more cash accumulated.

I believe that there's already enough that is accumulated from Kia's side, and I have more questions about how it will be used effectively. If we compare it with HMC as well, it looks like you have a lot of net cash on Kia's side.

Therefore, will there be any other plans for the usage of the net cash, for example, like the increase in TSR? If we look at the earnings results call that was done by GM recently, they announced that out of the $10 billion, about $6 billion will be done as a share buyback, which is over 50% of the TSR.

Therefore, if we look at the EV transition that GM is going towards, there will be a lot of costs that will be incurred from GM's side, but even with that in mind, they are increasing their shareholder returns. Therefore, if we look at Kia, the TSR being 35%, I believe is a little bit lower compared to the net cash that Kia has.

Although you have talked about the common investment that will be done on autonomous vehicles and robotics, I still think that TSR could be done on an individual level, separate from the other groups in HMG. Therefore, are there any other plans to use your net cash?

I believe that the answer is in the question itself, and so to summarize the comments, I think that although that cash that we hold on Kia is 20 trillion, the reason why it has gone up is that it has been to this level in the recent 5 to 6 years. Compared to the scale of our company, the 20 trillion net cash that we have isn't that excessive if we compare the net cash to our peer groups, as you're well aware.

The reason why I said that the answer is in the question is because of the room of the increase in the TSR. Of course, we are reviewing this, but in the situation that there may be another variables that may be in place or unexpected situations that may arise, we are holding the net cash in Kia currently.

As I've said before, if the performance and our earnings go up, then our cash goes up accordingly as well, we cannot help but think about the increase in our TSR.

This concludes the fiscal year 2025 fourth quarter earnings results by Kia. If you have any further questions, please contact the Kia IR team directly.

Thank you for your time and participation.