HD Hyundai posted its largest quarterly operating profit since shifting to a holding-company structure, helped by improved profitability in key businesses such as shipbuilding, refining, construction machinery, and power equipment.
HD Hyundai disclosed on the 13th that on a consolidation basis for the first quarter of this year, it recorded revenue of 19.6019 trillion won and operating profit of 2.8348 trillion won. Compared with the same period a year earlier, revenue rose 14.7% and operating profit increased 120.4%. Versus the previous quarter, revenue grew 4.6% and operating profit climbed 43.8%.
It also far outpaced securities-house forecasts. HD Hyundai's first-quarter results beat the securities consensus of revenue at 18.7555 trillion won and operating profit at 1.8030 trillion won by 4.5% and 57.2%, respectively. Net profit came to 2.0230 trillion won, up 160.2% from a year earlier.
With the shipbuilding and offshore institutional sector delivering the largest profit, the refining, construction machinery, and power equipment institutional sectors also improved profitability, widening the overall increase in operating profit.
HD Korea Shipbuilding & Offshore Engineering, the intermediate holding company for shipbuilding, posted first-quarter revenue of 8.1409 trillion won and operating profit of 1.3560 trillion won on a consolidation basis, helped by a higher sales mix of high-margin eco-friendly vessels, increased engine sales, and improved revenue in the offshore institutional sector. Compared with a year earlier, revenue grew 20.2% and operating profit rose 57.8%. The operating margin was 16.7%. HD Korea Shipbuilding & Offshore Engineering plans to strengthen profitability by continuing selective orders focused on high value-added vessels.
HD Hyndai Marine Solution also continued to improve results on the back of growth in its core ship aftermarket (AM) business and higher sales in the bunkering business. First-quarter revenue was 574.6 billion won, up 18.3% from a year earlier, and operating profit was 93.4 billion won, up 12.5%. The operating margin was 16.3%. HD Hyndai Marine Solution plans to enhance competitiveness in high value-added AM businesses such as engines and to upgrade its portfolio by expanding eco-friendly and digital businesses.
HD Hyundai XiteSolution, the holding company for the construction machinery institutional sector, posted revenue of 2.3831 trillion won and operating profit of 207.5 billion won, supported by a recovery in global demand and growth in industrial engines. Those figures were up 21.2% and 72.8%, respectively, from a year earlier. Early this year, HD Hyundai XiteSolution merged its subsidiaries HD Hyundai Construction Equipment and HD Hyundai Infracore to launch HD Construction Equipment. The company plans to expand construction machinery revenue based on integration synergies and diversify revenue sources into engines and AM.
HD Hyundai Oilbank, in the energy institutional sector, recorded first-quarter revenue of 7.7155 trillion won and operating profit of 933.5 billion won despite an uncertain operating environment, including greater oil-price volatility stemming from heightened geopolitical risks. HD Hyundai Oilbank plans to stabilize feedstock procurement by securing alternative crude, maintain stable plant operations, and continue process efficiencies.
HD Hyundai Electric, in the power equipment institutional sector, posted revenue of 1.0365 trillion won and operating profit of 258.3 billion won, supported by continued investment in North American power infrastructure and growth in rotating machinery sales. HD Hyundai Electric expects growth to become more robust once expansion of the Ulsan plant and its North American production subsidiary is completed.
An HD Hyundai official said, "We will do our best to ensure profitability can continue to expand going forward through selective orders, technology development, and process optimization."