HD Hyundai Construction Equipment (267270) Q2 2024 earnings summary

Executive summary

• Sales fell 17% year-over-year in 2Q24 due to a high base in 2023 and weak market demand.

• Operating profit declined 39% year-over-year, impacted by lower sales and higher promotional expenses.

• Net profit dropped 55% year-over-year and 33% sequentially.

• Revenue for H1 2024 was ₩1,832.1 billion, with operating profit at ₩112.2 billion and net profit at ₩76.4 billion.

• Construction equipment accounted for 76.5% of sales, with 91.3% of total revenue from exports.

Financial highlights

• 2Q24 sales: KRW 853 bn (-17% YoY, -13% QoQ); operating profit: KRW 58.6 bn (-39% YoY, +9% QoQ).

• H1 2024 revenue: ₩1,832.1 billion, operating profit: ₩112.2 billion, net profit: ₩76.4 billion.

• Gross margin for H1 2024 was 18.7%, with an operating margin of 6.1%.

• Cash and equivalents at June 30, 2024: ₩343.7 billion; total assets: ₩3,411.0 billion; total equity: ₩1,809.5 billion.

• Basic EPS for H1 2024: ₩4,199.

Outlook and guidance

• North America and Europe: Demand expected to marginally improve in 2H24; sales to benefit from retail promotions.

• India: Infrastructure policies to support market and revenue growth.

• Brazil: Sales growth to continue via diversified product portfolio despite market headwinds.

• Management expects continued global demand softness, especially in emerging markets, but anticipates a rebound in 2026.

• Ongoing investments in productivity and new model development are expected to support future growth.