The world's fourth largest memory chip producer posted a 133.9 billion won (113 million dollar) net profit in the three months ended September compared with a 616.8 billion won net loss a year earlier.

It is was the firm's first quarterly profit since the first quarter of 2002. Hynix posted a 530.2 billion won net loss in the second quarter of this year.

Its operating loss narrowed to 20.7 billion won in the third quarter from 258.2 billion in the previous quarter.

Sales rose 27 percent quarter-on-quarter to 990.7 billion won in the latest three months.

"Our results showed substantial improvement on stronger DRAM (dynamic random access memory) prices against reduced costs and profits from our overseas units," Hynix said. "Average DRAM sales prices rose by over 20 percent from a quarter earlier."

Consolidated revenues, which includes overseas operations, rose to 1.08 trillion won in the third quarter, 56 percent up from 689 billion won a year earlier.

Heavily-indebted Hynix was rescued in December last year by a multi billion dollar bailout arranged by South Korean creditor banks. Hynix takes up some 30 percent of South Korea's total exports of memory chips.

The company said its total debt dropped to 5.35 trillion won at the end of last month from 5.45 trillion won three months earlier.

Hana Securities industry analyst Lee Sun-Tae said Hynix showed improved results as it did not have to book factory depreciation costs due to a lack of investment in the past two years.

"Hynix may be able to remain profitable until the fourth quarter on usually stronger seasonal demand for DRAMs," Lee said. "But it's a question mark whether it will be able to post profits next year."

"Hynix did not make investment over the last two years due to cash shortage problems," Kim said. "It's crucial for Hynix to raise funds at an early time by selling its non-memory operations."

Hynix shares fell 2.72 percent to 7,500 won on Wednesday.

The bailout package worth 3.25 trillion won by bank creditors requires Hynix to restructure its debt-stricken operations.

Hynix has sought to sell-off its non-memory operations with a unit of US banking giant Citigroup reportedly named as a preferred bidder.

But tough battles lie ahead for the South Korean firm whose DRAM products have been targetted by countervailing duties in the United States and Europe.

The European Union approved the imposition of 34.8 percent anti-dumping tariffs on Hynix memory chips in August, two months after the US Department of Commerce slapped 44.71 percent countervailing duties on them.

The EU and US firms said the rescue package for Hynix by South Korean creditor banks, some controlled by the government, amounted to illegal state subsidies.

But South Korean creditors deny the government played any role in arranging the rescue package, a commercially-based decision also joined by some independent foreign banks to recover as much of their loans as possible from Hynix.

As the South Korean government appeals to the World Trade Organization against the US and EU moves, Hynix said it plans to maximize production at its US plant and develop emerging markets such as China, India and East Europe.

SPACE.WIRE