HD Construction Equipment Co., Ltd. Q3 operating profit hits 157.7 billion won, up 24% year on year

[Financial News] HD Construction Equipment Co., Ltd. increased its operating profit by about 24% year on year in the third quarter, buoyed by strong sales of engines for data center generators and improved profitability in its construction equipment business. Investment in infrastructure and mining in emerging markets and sales of new models in North America supported the construction equipment business, while growth in the engine business amid rising demand for electricity also contributed to results.
HD Construction Equipment Co., Ltd. announced on the 26th that it recorded revenue of 2.0915 trillion won and operating profit of 157.7 billion won in the third quarter. The figures were up 6.1% and 23.9%, respectively, from the same period a year earlier. Its operating margin also rose to 7.5%, about 1.1 percentage points higher than in the same period last year.
By segment, the construction equipment division recorded revenue of 1.6235 trillion won and operating profit of 109.9 billion won. While geopolitical uncertainty weighed on markets in the Middle East and Africa, demand for medium- and large-sized equipment continued in other regions on the back of infrastructure and mining investment. Higher sales of high-margin parts, driven by efforts to strengthen its aftermarket (AM) business, also contributed to improved earnings.
Revenue in advanced markets such as North America and Europe rose 4% year on year. Sales declined in Europe due to a downturn in the housing construction market, but sales of next-generation new models and trucks increased in North America. Growing demand in the equipment rental market also supported revenue growth. The company plans to expand its lineup of next-generation new models in advanced markets and focus sales efforts on new products.
Revenue in the Commonwealth of Independent States (CIS), Southeast Asia and Oceania increased 30.2% year on year, aided by the supply of products tailored to local markets. Sales of ultra-large equipment increased in the CIS, while sales of small equipment rose in Australia and New Zealand. Revenue in India also grew 26.6% as government-led infrastructure investment boosted sales of compact excavators and wheel loaders. Latin America likewise grew 26.8%, driven by rising demand from the mining sector.
The engine business division recorded revenue of 394 billion won and operating profit of 55.2 billion won. Sales of engines for generators increased as demand for data center power expanded, while sales of industrial engines also rose as the global construction equipment market recovered. In particular, a sales strategy focused on high-margin products delivered an operating margin of 14%.
HD Construction Equipment Co., Ltd. plans to expand production capacity to meet demand for engines for data center generators. Starting next year, it will produce megawatt (MW)-class diesel engines for generators at its new plant in Okdo-myeon, which is nearing completion, and expand the large gas-engine production line at its Incheon plant. Through these measures, the company plans to accelerate its push into the generator-engine market, which is expanding particularly in North America.
An HD Construction Equipment Co., Ltd. representative said, “By managing the business with a focus on profitability, we were able to achieve solid operating profit despite the recent decline in exchange rates. Going forward, we will strengthen our next-generation new models and locally tailored construction equipment lineup, while expanding our efforts to capture the market for engines for data center generators, supported by our new Okdo-myeon plant, and continue our growth.”
[email protected] Jung Won-il Reporter