Hyundai Construction Equipment Q1 Operating Profit 46.7 Billion Won... 38% Decrease

Sales Increased by 3.4% to 932.4 Billion Won

[Asia Economy Reporter Park Sun-mi] Hyundai Genuine (the intermediate holding company of Hyundai Heavy Industries Group's construction equipment division) affiliate Hyundai Construction Equipment announced on the 28th that it achieved sales of 932.4 billion KRW and an operating profit of 46.7 billion KRW in the first quarter.

Compared to the same period last year, sales increased by 3.4%. However, operating profit decreased by 38% due to rising raw material and logistics costs and the contraction of the Chinese market caused by COVID-19.

By region, growth in North America and emerging markets drove the increase in first-quarter sales. The North American market recorded 137.3 billion KRW, a 51% increase from the same period last year, due to increased demand for construction equipment driven by a strong real estate market and expanded infrastructure investment. The emerging markets also maintained strong performance since last year, achieving sales of 482.4 billion KRW, a 45% increase compared to the same period last year.

Although sales in the Chinese market were less than half compared to the same period last year due to economic contraction caused by the resurgence of COVID-19, the market diversification strategy reduced the proportion of the Chinese market from 33% of total sales in the first quarter of last year to 12% this quarter, mitigating the impact.

The outlook for markets in regions with sales growth due to portfolio diversification is also positive. Emerging markets such as Latin America and Asia continue to see increasing demand for large construction equipment due to rising raw material prices, while advanced markets like the U.S. and Europe are expected to benefit from a strong real estate market and large-scale government infrastructure investments. Additionally, although China contracted this quarter, infrastructure investment is expected to resume in the second half of this year as COVID-19 stabilizes.

A Hyundai Construction Equipment official stated, "Despite market uncertainties caused by COVID-19 and the Russia-Ukraine war, we achieved increased sales compared to the same period last year. We will do our best to secure profitability by increasing exports of equipment manufactured at production bases located worldwide, including India and Brazil, in preparation for rising raw material and logistics costs."

This content was produced with the assistance of AI translation services.