Sales and Operating Profit Decline Due to Weakness in Construction Equipment Sector
"Market Expected to Recover in Second Half"
Due to the contraction of the construction machinery market, HD Hyundai Infracore's operating profit decreased compared to last year.
HD Hyundai Infracore announced on the 22nd that it recorded sales of 1.1082 trillion KRW and an operating profit of 81.5 billion KRW in the second quarter of this year. Sales decreased by 15.7% year-on-year due to the tightening impact of the global construction machinery market. Despite solid performance in the engine business division, operating profit fell by 49.7% during the same period due to a decline in construction machinery sales.
Both sales and operating profit in the construction machinery business division decreased compared to the previous year. Sales recorded 786.3 billion KRW, down 22% year-on-year due to a high base effect last year and contraction in advanced and emerging markets. Operating profit was 30.8 billion KRW, affected by the sales decline and increased promotion costs and logistics expenses aimed at expanding market share.
The company expects the market to recover in the second half of the year as interest rate cuts, expanded infrastructure investment, and reshoring policies take effect in advanced markets including North America. In emerging markets such as Brazil and Indonesia, ongoing investments in infrastructure development are also expected to increase demand for construction machinery.
The engine business division recorded solid performance with balanced growth across industrial and defense engines as well as material components. Sales increased by 7% year-on-year to 321.9 billion KRW, and operating profit rose by 10% to 50.7 billion KRW.
The company forecasts that demand for generator engines will grow with increasing power demand and expanded construction infrastructure investment, and that sales of defense engines will accelerate, further expanding sales and profitability in the engine business division.
An HD Hyundai Infracore official stated, "In line with the expected recovery in construction machinery demand due to expanded infrastructure investment toward the end of the year, we will strengthen fundamental competitiveness through new model launches and enhanced sales capabilities, and do our best to improve profitability."
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