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[Alpha Biz=(Chicago) Reporter Kim Jisun] HD Hyundai announced on the 27th that its sales and operating profit reached 15.6213 trillion won and 472.6 billion won in the second quarter. This is down 0.8% and 61.8%, respectively, from the previous year. The sharp drop in operating profit was largely attributed to HD Hyundai Oilbank, which had been sluggish due to falling oil prices and a limited recovery in demand.
HD Hyundai Oilbank's operating profit in the second quarter was 36.1 billion won, down 97.4% from a year earlier. Sales fell 20.8 percent to 6.9725 trillion won during the same period.
HD Hyundai Oilbank is set to receive regular maintenance in the third quarter, so it is difficult to expect earnings recovery right away. It is expected to show an operation rate of 50-60% compared to the average.
Other business sectors, on the other hand, performed well. In particular, the shipbuilding sector succeeded in turning into a surplus for the second consecutive quarter following the previous quarter.
HD Korea Shipbuilding & Marine Engineering Co. (009540)'s second-quarter sales rose 30.2 percent on-year to 5.4536 trillion won due to increased construction volume, rising construction unit prices and increased sales in the engine machinery sector. Among the three subsidiaries, only Hyundai Mipo Dockyard did not reach a surplus. Hyundai Mipo Dockyard posted an operating loss of 58.5 billion won in the second quarter, widening its deficit year-on-year.
HD Hyundai Site Solution, an intermediate holding company in the construction machinery business, also posted an operating profit of 270.9 billion won, up 141.4 percent from a year earlier. Sales rose 13.7 percent year-on-year to 2.4072 trillion won as they continued to grow steadily in all sectors, including engines and industrial vehicles, amid strong advanced markets for construction machinery, especially in emerging and North America.
HD Hyundai Construction Machinery (267270) achieved sales of 1.321 trillion won and operating profit of 96.6 billion won, exceeding sales of 1 trillion won for the second consecutive quarter. In particular, HD Hyundai Engineering & Construction Machinery plans to launch a new model of a mini excavator in the second half of the year, which is expected to set the stage for a leap forward in advanced markets.
HD Hyundai Electric also recorded sales of 642.5 billion won and operating profit of 58.8 billion won in the second quarter, the highest ever. As large-scale orders continued in the Middle East, the U.S. and Europe, the company raised its annual order target by 21% to $3.186 billion from the previous $2.634 billion.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
