Hyundai Rotem Q3 operating profit falls 11% to 247.1 billion won; “Pursuing export diversification”

[Financial News] Hyundai Rotem’s profitability fell 11% from the same period last year, despite expanding its business in the third quarter of this year. The company plans to pursue export diversification and sustain mid- to long-term growth, backed by an order backlog approaching 30 trillion won.
Hyundai Rotem said on the 19th that it recorded consolidated revenue of 1.6207 trillion won and operating profit of 247.1 billion won in the third quarter of this year. Revenue rose 0.1% from a year earlier, while operating profit fell 11.0%. The operating margin was 15.2%, down 2.0 percentage points from the same period last year. Compared with the previous quarter, however, revenue increased 0.9% and operating profit rose 6.3%.
Cumulative revenue from the first through the third quarter of this year was 4.6842 trillion won, up 11.2% from the same period last year. Cumulative operating profit over the same period fell 4.7% to 703.7 billion won. The cumulative operating margin was 15.0%.
By business segment, third-quarter revenue at the AD&RH division, which handles defense, robotics and hydrogen businesses, among others, fell 10.1% from a year earlier to 841.2 billion won. Operating profit decreased 10.5% to 236 billion won. The operating margin, however, remained high at 28.1%.
The RS division, which handles the rail business, posted revenue of 656.1 billion won, up 21.4% from a year earlier. Operating profit fell 16.9% to 5.9 billion won. The EP division, which handles eco-friendly plant projects, saw revenue fall 13.6% to 123.4 billion won and operating profit decline 24.6% to 5.2 billion won.
At the end of the third quarter, Hyundai Rotem’s order backlog stood at 29.142 trillion won, down 2.1% from the end of last year but still close to 30 trillion won. By division, the backlog was 9.5228 trillion won for AD&RH, 19.031 trillion won for RS and 588.2 billion won for EP.
In particular, the rail division secured orders in overseas markets, including a 344.5 billion won contract in September to supply electric multiple units for Taiwan’s Taoyuan Brown Line and provide maintenance, and a 310.3 billion won contract to maintain electric multiple units for Singapore’s Land Transport Authority (LTA).
The company’s financial structure also improved. Its debt-to-equity ratio was 148% at the end of the third quarter, down 58 percentage points from the end of last year. Excluding advance payments and contract liabilities, the ratio was 42.6%. Cash and cash equivalents totaled 1.8787 trillion won, an increase of 970.3 billion won from the end of last year, while borrowings stood at 145 billion won.
A Hyundai Rotem official said, “We continued to achieve solid revenue growth as production of defense export products continued,” adding, “We plan to keep pursuing export diversification and sustain mid- to long-term growth.”
[email protected] Jeong Won-il Reporter