Two HD Hyundai units post robust earnings on overseas orders

HD Hyundai Electric Co.‘s Alabama factory [Courtesy of HD Hyundai Electric]

HD Hyundai Infracore Co. and HD Hyundai Electric Co., both under South Korea’s HD Hyundai Group, reported strong earnings for the first quarter on the back of robust demand in North America.

Hyundai Electric, a power transformer manufacturer, posted 46.3 billion won ($34.78 million) in operating profit in the first quarter on sales of 568.6 billion won, the company said in a regulatory filing on Monday. The figures represent a significant increase of 177.2 percent and 61.6 percent, respectively, compared to the same period last year.

The results also exceeded the market consensus, which had predicted an operating profit of 35.6 billion won on sales of 512.8 billion won.

The strong performance in the first quarter was driven by increased demand for power equipment in North American transmission and distribution markets and expanded infrastructure investment in the Middle East.

Last year, orders from the North American market nearly tripled to $1.02 billion, compared to $390 million in the previous year. Orders from the Middle East nearly doubled to $519 million during the same period.

Hyundai Electric was able to respond to the growing demand in North America through its Alabama factory.

Hyundai Infracore, which produces construction machinery such as excavators and wheel loaders, also recorded strong results in the first quarter.

The company posted an operating profit of 152.6 billion won in the first quarter, up 45.5 percent from a year ago, on sales of 1.29 trillion won, up 11.6 percent.

Revenue fell short of the market consensus of 1.32 trillion won but operating profit exceeded expectations by a wide margin.

Hyundai Infracore’s performance was largely driven by markets outside of China.

Both companies are expected to maintain their strong momentum in the second quarter.

Hyundai Electric raised its annual order target to $2.63 billion from $1.95 billion. Analysts projected that Hyundai Electric will post an operating profit of 122.1 billion won on sales of 1.31 trillion won in the second quarter.

Hyundai Infracore is also estimated to achieve an operating profit of 122.1 billion won in the second quarter, up 41 percent from the same period a year ago, on sales of 1.31 trillion won, up 10 percent.