Hyundai-Rotem’s operating profit ratio tops 5% mark

[Courtesy of Hyundai-Rotem]

Hyundai-Rotem Co., a Seoul-based manufacturer of rolling stock, defense products and plant equipment, has doubled its order backlog and achieved an operating profit ratio of six percent in 2023 after four years of drastic restructuring.

Data from several sources on Monday, including the Financial Supervisory Service (FSS), found that Hyundai-Rotem hit a sales revenue of 3.58 trillion won ($2.6 billion) and an operating profit of 210 billion won in 2023, with the operating profit ratio at 5.9 percent. The last time the company achieved a profit margin above the 5 percent mark was in 2013.

Compared to the pre-restructuring earnings observed in 2019, the company witnessed a turnaround with a staggering 1.12 trillion won gain in sales and a rise of 489.9 billion won in operating profit.

The restructuring program began under the leadership of its Chief Executive Lee Yong-bae in January 2020. Citing the previous three years of net loss from 2017 to 2019, mainly attributable to chronic lower-cost orders, Lee promised a drastic overhaul of corporate governance to build a sustainable environment for the company.

Hyundai-Rotem also turned its focus toward international projects. It won a contract deal from Australia worth 1.2 trillion won in 2023, the single largest railroad project that the company has ever won, and the manufacturer placed new orders worth a total of 5.27 trillion in the railroad sector throughout 2023.

Industry observers said the company has an order backlog of five years across various sectors in an estimated 18 trillion won, according to the latest data.