▶ Sales of KRW 1.1545 trillion, operating profit of KRW 104.9 billion, decrease of 13% in sales and 4.5% in operating profit compared to the same period of the previous year

▶ Despite concerns over the Chinese market’s contraction, recorded operating profit margin of 9% aided by increased sales volume in North America and emerging markets

▶ “With a bright outlook for North America and emerging markets due to large-scale infrastructure investment, we will maximize profitability through focused targeting.”

Hyundai Genuine (the holding company of Hyundai Heavy Industries Group’s construction equipment unit) subsidiary Hyundai Doosan Infracore reported a solid performance with operating profit margin of 9% despite concerns about the shrinking Chinese market.

Hyundai Doosan Infracore announced on April 27 (Wed.) that it recorded sales of KRW 1.1545 trillion and operating profit of KRW 104.9 billion in the first quarter of 2022.

Sales decreased 13% compared to the same period last year due to the impact of the Chinese market, which has contracted due to COVID-19. Operating profit also decreased slightly by 4.5% YoY. However, profits improved as sales increased in advanced and emerging markets such as North America and Europe, with operating margin reaching 9.1% thanks to a surge in external engine sales volume and increased engine aftersales service.

Breaking down the sales into divisions, the Construction Equipment Division's sales growth in advanced and emerging markets such as North America and Europe stands out. In the case of advanced markets, sales increased 32.8% YoY to KRW 302.4 billion due to the favorable economy, increased demand for housing and infrastructure construction, and strategies like strengthened lineup through new product launches and expanded dealer network. The figure was equivalent to 29% of the region's total sales last year.

Emerging markets such as Asia and South America also recorded KRW 438.3 billion in sales, a 3.8% increase compared to the same period of the previous year due to rising raw material prices and government-led economic stimulus measures.

In particular, the proportion of sales in advanced and emerging markets to total sales has been gradually increasing. While advanced markets accounted for 19% of total sales in the first quarter of last year, it increased to 33% in the first quarter of this year. The proportion of emerging markets increased from 36% in the first quarter last year to 48% in this quarter.

In the case of the Engine Business Division, the increased external sales of small diesel (G2) engines mounted on excavators, forklifts, and agricultural machinery and the strengthening of the aftersales market helped record double-digit operating profit rate (12.1%) and turnaround to positive operating profit of KRW 28.2 billion.

“With countries worldwide announcing large-scale economic stimulus measures such as the Biden administration's announcement of support for infrastructure investment and the Jobs Act (IIJA) investment support, we expect the demand for construction equipment in advanced and emerging markets to increase. We will focus on these regions by launching new products promptly and expanding sales of large models to maximize profitability to mitigate the uncertainty of the Chinese market,” an official from Hyundai Doosan Infracore said.

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■  1Q 2022 Results of Hyundai Doosan Infracore