HD Construction Equipment's Q3 Operating Profit Rises 24% YoY to 157.7 Billion Won

Revenue Reaches 2.0915 Trillion Won, Up 6.1% Year on Year
Improved Construction Equipment Profitability and Strong Engine Sales
Expands Data Center Generator Engine Business

HD Construction Equipment's operating profit rose more than 20% in the third quarter of this year, buoyed by improved profitability in its construction equipment business and strong engine sales.

HD Construction Equipment CI. HD Construction Equipment

HD Construction Equipment disclosed on Oct. 26 that it recorded revenue of 2.0915 trillion won and operating profit of 157.7 billion won in the third quarter of this year. These figures were up 6.1% and 23.9%, respectively, from the same period last year. Its operating margin was 7.5%.

Higher sales of engines for generators and industrial use drove revenue growth, while improved profitability in the construction equipment business and strong performance in the engine business lifted operating profit.

By business segment, the construction equipment division recorded revenue of 1.6235 trillion won and operating profit of 109.9 billion won. Performance was weak in the Middle East and Africa due to geopolitical uncertainty, but sales of medium- and large-sized products continued in other regions amid sustained demand for infrastructure and mining investments. Higher sales of high-margin aftermarket (AM) parts also contributed to improved results.

Revenue in developed markets, including North America and Europe, increased 4% from a year earlier. Sales declined in Europe due to the downturn in the housing construction market, while sales of next-generation models and truck products rose in North America. Growing demand in the equipment rental market also supported revenue growth.

Growth continued in emerging markets as well. Revenue in the Commonwealth of Independent States (CIS), Southeast Asia and Oceania rose 30.2%, driven by expanded supply of products tailored to local markets. Sales of ultra-large construction equipment increased in the CIS, while sales of small construction equipment grew in Australia and New Zealand.

Revenue in India rose 26.6%, as sales of mini excavators and wheel loaders increased amid expanded government-led infrastructure investment. The Latin American market also grew 26.8%, supported by stronger mining demand.

The engine business division recorded revenue of 394 billion won and operating profit of 55.2 billion won. Sales of generator engines increased as demand for electricity from artificial intelligence (AI) data centers grew, while industrial engine sales expanded alongside a recovery in global construction equipment markets. A sales strategy focused on high-margin products resulted in an operating margin of 14%.

HD Construction Equipment plans to step up its efforts to capture the data center generator engine market. Starting in 2027, it will produce megawatt (MW)-class generator diesel engines at its new Gunsan plant, which is nearing completion, and expand the production line for large gas engines at its Incheon plant. The company aims to meet rising demand for data center generator engines, particularly in North America.

An HD Construction Equipment official said, "By managing our businesses with a focus on profitability, we were able to achieve solid operating profit despite the recent decline in exchange rates. We will continue to grow by strengthening our lineup of next-generation models and construction equipment tailored to local markets, while expanding our efforts to capture the data center generator engine market, building on our new Gunsan plant."

This content was produced with the assistance of AI translation services.