Hyundai Doosan Infracore (CEO: Cho Young-cheul, OH Seung-hyun), a subsidiary of HD Hyundai’s construction equipment business, announced their Q4 and 2022 annual earnings result.
Hyundai Doosan Infracore announced its earnings on Friday, Feb 3rd stating that it reached KRW 4.75 trillion last year with an operating profit of KRW 332.5 billion. This is a 3.5% increase in revenue and 25.7% increase in operating profit compared to 2021.
When just looking at Q4, revenue increased by 19.4% YoY recording KRW 1.23 trillion while operating profit increased by 461.8% YoY recording KRW 66.4, driving the performance peak.
The background for Hyundai Doosan Infracore’s good performance in 2022 was mainly due to the on-going strong demand for construction equipment as governments expanded investments on infrastructure as means to prepare for post-COVID 19, along with the continued rise in raw material prices. Its’ strategy of increasing selling prices and providing a better line-up mix by region·product has also been considered a major factor in enhancing profitability.
The strong progress in the engine business is also noteworthy. With increased demand for construction equipment along with demand for generators and engines for small-sized off-highway equipment recovering, the engine business recorded an operating profit of KRW 125.6 billion, a 164.7% increase YoY, leading the overall improvement of the company’s profitability.
On the other hand, while the construction equipment business succeeded to maintain revenue to that of the previous year by cancelling out the stagnation in China with the gains in developed·emerging markets, operating profit dropped modestly by 4.7% due to the increase in raw material and shipping costs.
When taking a closer look, domestic and emerging markets saw a 14.6% increase in revenue compared to the year before with more sales in large-sized mineral mining equipment which contributed to the reinforced profitability. While infrastructure and rental demands also continued in developed countries such as North America and Europe, the company’s efforts to expand sales network added on to the revenue increase of 24.1% YoY.
While the Chinese market was stagnant due to its sluggish economy and COVID-19 lock downs, it successfully rebounded in Q4 thanks to the base effect and orders growing for eco-friendly equipment. Revenue recorded a 6.7% increase YoY, shedding light on positive performance going forward.
Performance prospects are also bright for 2023 as investments on infrastructure is expected to expand globally as a mean to stimulate the economy, and demand for minerals and raw material mining is consistently strong.
Hyundai Doosan Infracore plans to lead better earnings with the launch of new products and expansion in its sales network. As a result, it is expecting a revenue of KRW 5.2 trillion in 2023, which will be a first to exceed KRW 5 trillion.
“2023 will be a year where we focus not only on increasing revenue but also enhancing profitability”, said a representative of Hyundai Doosan Infracore, and added “We will also spare no expenses on developing new technologies needed to secure the company’s future growth engines.” <EOD>