Energy and Construction Machinery Slump... Shipbuilding and Power Equipment on the Rise
HD Hyundai announced on the 1st that its consolidated operating profit for the third quarter was 431.5 billion KRW, a 35.4% decrease compared to the same period last year. During the same period, sales increased by 21% to 16.5991 trillion KRW.
While the shipbuilding and power equipment sectors continued stable performance supported by strong business conditions, the decline was due to decreased demand in the energy and construction machinery sectors.
In the shipbuilding and marine sector, HD Korea Shipbuilding & Offshore expanded sales and operating profit significantly through an increase in high value-added vessel orders and improved productivity. Sales rose 24.6% year-on-year to 6.2458 trillion KRW, and operating profit surged 477.4% to 398.4 billion KRW, widening the profit margin.
HD Hyundai Oilbank recorded sales of 7.5898 trillion KRW but an operating loss of 268.1 billion KRW. Although sales increased by 30.3% compared to the same period last year, refining margins declined due to the continued drop in international oil prices and a slowdown in global industrial demand following the previous quarter, resulting in a turnaround to an operating loss.
In the construction machinery sector, HD Hyundai Site Solutions posted sales and operating profit of 1.7733 trillion KRW and 72.8 billion KRW, down 14.0% and 54.8% respectively from the same period last year. The prolonged global tightening led to weak demand, causing the performance decline; however, the industrial vehicles, engines, and parts businesses maintained stable profitability.
HD Hyundai Electric achieved sales of 788.7 billion KRW and operating profit of 163.8 billion KRW, with increases of 13.6% and 91.8% year-on-year respectively, supported by sustained demand growth in power equipment and increased sales of distribution and rotating equipment.
HD Hyundai Marine Solutions saw a 28.6% increase in sales to 461.3 billion KRW, driven by strong performance in both the ship aftermarket and ship modification businesses. Operating profit also rose 66.1% to 83.4 billion KRW.
HD Hyundai Energy Solutions recorded sales of 100.6 billion KRW and operating profit of 3.4 billion KRW, while HD Hyundai Robotics posted sales of 59.8 billion KRW and operating profit of 1.6 billion KRW.
An HD Hyundai official stated, "Although the energy and construction machinery sectors experienced some decline, operating profits in all other business sectors increased significantly. With the expansion of profitability in the shipbuilding sector and stabilization of refining margins in the energy sector, we expect a rapid improvement in performance."
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