▶ Reported KRW 874 billion in revenue, KRW 63 billion in operating profit
▶ Higher sales price and increased heavy sales resulting in 70% operating profit growth
▶ “Will solidify business strategy to stay strong against various uncertainties and to maintain current momentum”
Hyundai Construction Equipment ( a subsidiary of Hyundai Genuine) recorded an earnings surprise in its third quarter despite the shrinking Chinese market and by successfully targeting the North American and emerging markets.
On Wednesday, Oct 26, Hyundai Construction Equipment announced its earnings which reached KRW 874 billion in revenue, KRW 63 billion in operating profit, and 7.2% growth in operating profit rate.
Revenue increased by 17.1% while operating profit surged by 70.3% year-on-year due to higher sales pricing and heavy sales.
When observing Q3 performance by region, the Chinese market, being impacted by COVID-19, marked a 22% drop in revenue, while North America, direct exports, India, Brazil and other emerging markets performed well as a whole, making up for the loss in China.
Demand has been stable in direct exporting markets including Latin America, oil-producing countries in the Middle East, and Indonesia, recording KRW 350 billion, a 27% increase YoY. Brazil especially saw great profit results as it recorded remarkable growth in sales and higher sales pricing from H1. The North American market also reached KRW 163 billion in revenue with higher demand and a larger ratio of heavy equipment sales from large-scale construction orders.
As a result, Hyundai Construction Equipment recorded an accumulated revenue of KRW 2.68 trillion and operating profit of KRW 146.4 KRW as of Q3.
Hyundai Construction Equipment forecasted this favorable momentum to last until the next quarter as demand for mid-to-heavy equipment is expected to increase with investments in infrastructure growing in the Middle East and other resource-based emerging countries. Such potential can be easily seen as over 700 contracts are being signed on a monthly basis and projects such as Neom City are being pushed ahead in these regions. A governmental-level stimulus policy is also expected in China after its Party Congress, adding to such anticipation.
A Hyundai Construction representative mentioned, “Our business has stayed lucrative even during uncertainties home and abroad,” and added, “we will closely observe changes in the business environment and solidify our business strategy to keep this momentum going.”
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