Agricultural machinery corporations Daedong(000490) posted operating profit of 41.2 billion won in the second quarter this year. That was up 64.3% from a year earlier.
Daedong said on the 10th that, on a consolidation basis, second-quarter revenue was 467.1 billion won and operating profit was 41.2 billion won, based on preliminary figures. Revenue rose 12.7% from a year earlier. It beat the previous quarterly record high of 457.3 billion won in the second quarter of 2022 by 2.1%.
First-half consolidation revenue was 844.8 billion won, up 5.4% from a year earlier. It was the highest ever, 1.1% more than the previous record of 835.8 billion won in the first half of 2023. Operating profit for the same period was 47.3 billion won, up 0.9%.
Even as the agricultural machinery markets in North America and Korea contracted and Europe grew only limitedly, stronger product competitiveness and distribution networks drove results. In North America, the business model, previously centered on small tractors, was expanded to medium- and large-sized tractors and compact construction equipment (CCE) such as mini excavators. In line with the broader lineup, the logistics base and dealer network are also being reinforced.
Daedong opened an integrated logistics warehouse of about 8,900 pyeong in Tacoma, Washington, in the third quarter last year, expanding its business area from the East Coast to all of North America. It secured 30 new dealers, bringing the total dealer network to 600. Dealers newly recruited over the past two years accounted for 13% of the North American subsidiary's first-half revenue this year.
As sales of high value-added products increased, the product mix also improved. In North America, first-half sales of the HX model, a medium- and large-sized tractor, rose 55% from the same period last year. Sales of compact construction equipment also increased 28%.
By linking precision agriculture solutions with products, the company is also securing differentiated competitiveness. In Korea, it reorganized its sales and service networks in line with the launch of an artificial intelligence (AI) tractor and the expansion of precision agriculture services. As demand-driven sales policies and a shift to a wide-area dealership-centered distribution network took effect, the domestic market share entered the 40% range. As of the first half, the number of wide-area dealerships increased to 18.
The recurring revenue business, which earns revenue through parts and services after equipment sales, also grew. First-half parts revenue was 56.7 billion won, up about 20% from a year earlier.
Vice Chairman Won Yu-hyeon of Daedong said, "Even amid a global agricultural machinery market slump, we strengthened our product portfolio and distribution competitiveness to achieve record revenue in both the second quarter and the first half," and added, "We will make this year the first year of Daedong's AI and Robotics transformation and, based on the competitiveness and results built in our existing business, push ahead with future businesses such as precision agriculture, AI agricultural machinery, and agricultural robots."