Operating Profit from Construction Machinery Plummets by 90% Due to Global Downturn
HD Hyundai's construction machinery affiliate, HD Hyundai Infracore, announced on the 4th that its consolidated operating profit for last year was 184.2 billion KRW, a 56% decrease compared to the previous year.
Sales amounted to 4.1142 trillion KRW, down 11.7% from the previous year. Net profit decreased by 53% to 108.4 billion KRW.
In the fourth quarter of last year, the operating loss was 10.9 billion KRW, turning to a deficit. During this period, sales were 938.9 billion KRW, down 11.7% year-on-year, but net profit turned positive to 3.2 billion KRW.
HD Hyundai Infracore explained that the decline in operating profit was due to decreased construction machinery sales and increased variable costs such as promotional and logistics expenses. Sales also fell due to the prolonged tightening of the global construction machinery market.
By business segment, the construction machinery division's operating profit last year plummeted by 90% year-on-year to 27.5 billion KRW. Sales also dropped about 15% to 2.9723 trillion KRW.
In the engine division, sales last year were 1.1419 trillion KRW, down 2% from the previous year, but operating profit increased by about 3% to 156.6 billion KRW.
HD Hyundai Infracore expects the global construction equipment market to rebound this year, projecting sales of 4.8 trillion KRW and operating profit of 233.5 billion KRW.
A representative of HD Hyundai Infracore said, "As political and economic uncertainties in major countries including the United States are gradually resolved, infrastructure investment promotion and gradual recovery in construction machinery demand will be driven. We will do our best to secure preemptive competitiveness in preparation for the market turnaround by launching next-generation new models and investing in future new businesses."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
