HD Hyundai Construction Equipment (267270) Q3 2024 earnings summary

Executive summary

• Sales declined 12% year-over-year in 3Q24, mainly due to prolonged geopolitical risks and delayed demand recovery in developed markets, particularly ahead of the US presidential election.

• Operating profit dropped 20% year-over-year in 3Q24, impacted by lower sales volume and increased fixed cost burden.

• Net profit fell 66% year-over-year in 3Q24, reflecting both operational and non-operational headwinds.

• Revenue for the first nine months of 2024 was ₩2,648.9 billion, down from ₩3,825.0 billion year-over-year, with operating profit at ₩155.2 billion and net profit at ₩87.9 billion, both declining from the previous year.

• Export sales accounted for 91.7% of total revenue, with construction equipment representing 76.9% of sales.

Financial highlights

• 3Q24 sales: KRW 816.8bn, down 12% YoY and 4% sequentially.

• Operating profit: KRW 43bn, down 20% YoY and 27% sequentially; OP margin at 5.3%.

• Net profit: KRW 11.4bn, down 66% YoY and 63% sequentially.

• Revenue: ₩2,648.9 billion (down from ₩3,825.0 billion year-over-year).

• Basic EPS: ₩4,841 (down from ₩7,659 year-over-year).

Outlook and guidance

• Demand recovery in North America and Europe remains delayed despite interest rate cuts; purchase delays expected until after the US presidential election.

• India and Brazil expected to maintain growth momentum, supported by infrastructure investment and stable policy environments.

• The global construction equipment market is expected to recover in 2024, driven by anticipated US interest rate cuts and increased infrastructure investment post-election.

• The company plans to continue expanding its product portfolio, strengthen its dealer network, and focus on R&D for new technologies.

• Emerging markets show mixed trends, with some regions recovering as elections conclude and infrastructure investments resume.