HD Hyundai Infracore (CEOs Young-cheul Cho and Seung-hyun Oh), a subsidiary of HD Hyundai's Construction Equipment business sector, released its annual financial report including the fourth-quarter results for 2023.
HD Hyundai Infracore announced its 2023 financial results on February 2,2024 (Friday), reporting that revenue decreased 2% to KRW 4.6596 trillion and operating profit increased 25.8% to KRW 418.3 billioncompared to 2022.
Bolstered by solid demand, HD Hyundai Infracore's robust performance in the global construction equipment market and the engine business helped the company maintain the previous year’s revenue level. "In addition, we posted higher operating profit by tailoring products to local markets, selecting high-margin products, and raising sales prices," the company said in its earnings report.
The construction equipment business offset a drop in sales in emerging markets particularly Korea and China with robust sales growth in North America and Europe, resulting in flat revenue compared to the previous year. Operating profit grew 28.5% thanks to efforts to improve profitability and price increases.
Revenue in North America and Europe increased 12.8% year-on-year, and their share of construction equipment business revenue rose by 7 percentage points to 41% compared to the previous year. Sales in emerging markets declined 2.9% year-on-year due to the economic slowdown in Asia. The Chinese market continued to be impacted by the real estate downturn, resulting in a 55.3% drop in sales compared to the previous year.
Capitalizing on the robust external demand for engines across power generation, industrial, and defense markets, the Engine Business Division achieved a remarkable 11.9% growth in revenue, recording KRW 1.1616 trillion compared to the previous year. This exceptional feat, coupled with a double-digit operating profit margin, made a significant contribution to enhancing the company's overall profitability.
Breaking down the company's performance in Q4 2023, overall revenue declined 20.6% to KRW 981.6 billion compared to the same period in the previous year, with operating profit plummeting 78.9% to KRW 14 billion. The company's construction equipment business suffered a decline in sales and operating profit in the fourth quarter due to a combination of factorsincluding weak demand in Asia and Europe and one-off expenses related to brand replacement.
Forecasting a rebound in the global construction equipment market from the end of the year after a period of adjustment, HD Hyundai Infracore has established sales and operating profit targets of KRW 5.02 trillion and KRW 445 billion, respectively, for 2024.
HD Hyundai Infracore's board of directors has approved a cash dividend of KRW 110 per common share for 2023, for a total payout of KRW 22 billion. It also approved a plan to buy back and cancel KRW 56 billion of its own shares. The company's total payout surged 63% to KRW 78 billion—driven by a combination of cash dividends and share buybacks—representing a significant increase from the KRW 47.9 billion in dividends paid out in the previous year.
“We will continue to generate strong profits by launching new products tailored to the regional characteristics and expanding our dealer network.We will also strive to enhance shareholder value based on profitability,” HD Hyundai Infracore officials said. <End>
