HD Construction Equipment posted second-quarter results that beat market expectations this year, helped by a recovery in the construction equipment industry and increased sales of new products.
HD Construction Equipment said in a filing on the 29th that, on a consolidation basis, operating profit for the second quarter this year was 248.9 billion won, up 92% from 129.7 billion won in the same period a year earlier, according to preliminary figures.
Revenue was 2.4342 trillion won, up 18.2% from 2.0588 trillion won in the same period a year earlier. Net profit was 180.7 billion won, about 11 times higher than 15.8 billion won a year earlier.
This is above forecasts by the securities industry. Earlier, the securities industry expected HD Construction Equipment to record 189.6 billion won in operating profit in the second quarter this year. The actual operating profit is 31% higher than that.
The main driver of improved results was expanded product sales thanks to the recovery in the construction equipment industry. Revenue in the construction equipment institutional sector increased across North America, Europe, the Middle East and Asia.
The regions with the largest revenue growth were the Middle East and Africa. In the second quarter this year, construction equipment revenue in those regions was 416.1 billion won, up 51% from the same period a year earlier.
Within those regions, the African market in particular led the revenue expansion. HD Construction Equipment said revenue grew in East Africa, including Ethiopia and Sudan, where gold mine demand is high, and Libya, where there is reconstruction demand.
In addition, revenue in Latin America, Europe and India rose 29.9%, 26.2% and 22.1%, respectively, from a year earlier.
Revenue in the engine institutional sector also expanded, helping strengthen profitability. In the second quarter this year, revenue in the engine institutional sector was 386.1 billion won, up 4.6% from a year earlier. HD Construction Equipment said revenue from industrial and defense engines in particular increased.
Operating profit was driven by improved profitability from higher product shipment volumes and a better product mix (composition). HD Construction Equipment launched five new models from June last year to March this year. It also said price hikes and reduced promotional expenses affected the results.
A HD Construction Equipment official said, "Emerging markets grew much more than expected due to mining and infrastructure investment, and Europe also grew significantly in the first half," adding, "We expect this trend to continue in the second half."