Hyundai Doosan Infracore Q2 Operating Profit 86.6 Billion KRW... Down 20.6%

Impact of China's Lockdown on Raw Material and Logistics Cost Increases

[Asia Economy Reporter Park Sun-mi] Hyundai Doosan Infracore, a construction equipment subsidiary of Hyundai Heavy Industries Group, announced on the 26th that it recorded sales of 1.188 trillion KRW and an operating profit of 86.6 billion KRW in the second quarter.

Sales decreased by 5% year-on-year due to sluggish performance in the Chinese market caused by lockdowns, despite increased sales in emerging construction equipment markets and growth in the engine business division. Operating profit also fell by 20% year-on-year due to rising raw material prices and logistics costs.

Looking at the performance by business division, the construction equipment business (Heavy) recorded sales of 940 billion KRW and an operating profit of 51.1 billion KRW, with sales down 8.8% and operating profit down 40.5% compared to the same period last year.

In Korea and emerging markets, sales increased by 17.9% year-on-year, supported by rising raw material prices and government-led economic stimulus policies. Although sales in North America and Europe slightly decreased by 1.8% year-on-year due to temporary logistics disruptions, the company expects solid performance in the second half as the economy remains strong and demand for housing and infrastructure construction continues. In the Chinese market, sales dropped sharply by 51.8% year-on-year due to COVID-19 lockdown measures, significantly impacting overall sales decline.

Hyundai Doosan Infracore is increasing the proportion of products manufactured at its Chinese plants sold to emerging markets to secure profits amid the contraction of the Chinese market, and it expects demand in the construction equipment market to recover after September, when the Chinese government is anticipated to launch full-scale economic stimulus measures.

The engine business division saw a surge in demand for engines used in generators and vehicles, driven by the global economic upturn and rising oil prices, achieving sales of 248 billion KRW, up 12.4% year-on-year, and an operating profit of 35.5 billion KRW, maintaining a stable double-digit operating profit margin of 14.3%.

A Hyundai Doosan Infracore official stated, “As uncertainties in the business environment increase, it is necessary to focus on markets with sustained growth. We have secured large-scale orders in emerging markets, and in advanced markets, we will do our best to maintain solid profits through new product launches tailored to market characteristics such as bulldozers, expansion of sales of large models, and additional price increases.”

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