ILJIN Electric Co., Ltd. posts 70 billion won in Q3 operating profit, up 98.3% year on year

[Financial News] Buoyed by increased investment in global power grids, ILJIN Electric Co., Ltd. posted strong growth in both sales and operating profit in the third quarter of this year. The results are believed to have been supported by rising demand for power equipment as the United States replaces aging power grids and Europe expands renewable energy generation.
ILJIN Electric Co., Ltd. said on the 11th that it recorded sales of 637.6 billion won and operating profit of 70 billion won in the third quarter of this year. The figures were up 41.6% and 98.3%, respectively, from the same period a year earlier.
Growth in earnings was driven by both the heavy electrical equipment and cable businesses. Demand for power equipment, including transformers and circuit breakers, as well as cables, is rising as replacement of aging power infrastructure in the United States, expansion of renewable energy generation in Europe and global power-grid construction projects gather pace.
The order backlog is also holding at a high level. As of the third quarter, ILJIN Electric Co., Ltd.'s backlog stood at approximately $2.25399 billion (about 3.0492 trillion won). Heavy electrical equipment, including transformers and circuit breakers, accounted for 69% of the total backlog, while cables made up 31%. By region, overseas orders accounted for 72% and domestic orders 28%, with overseas markets making up the bulk.
ILJIN Electric Co., Ltd. expects sales growth in its heavy electrical equipment and cable businesses to continue. It expects growth to accelerate further as overseas orders for its cable business expand. In South Korea, construction of the Energy Superhighway and major power infrastructure projects are also expected to underpin new demand.
The company says demand for replacement of aging power grids in the U.S. market remains robust. It expects demand to also rise for extra-high-voltage transformers needed to build new transmission networks if construction of renewable energy facilities expands in the future.
ILJIN Electric Co., Ltd. expects the impact of possible tighter regulations on U.S. data centers to be limited. The company said, "All the transformers we supply to the United States are extra-high-voltage transformers used to build power grids. They are a different product category from distribution transformers connected directly to data centers."
The company also expects demand for power equipment driven by data center expansion to continue over the long term, as U.S. big tech companies are considering measures such as covering the cost of infrastructure to supply power to data centers and adjusting usage according to power supply and demand.
ILJIN Electric Co., Ltd. said, "With shipments of existing orders continuing, we expect to post solid results in the fourth quarter," adding, "There are also large-scale projects expected to generate orders in the fourth quarter, so there is potential for further growth in orders."
[email protected] Lim Su-bin Reporter