It appears that Hyundai’s purchase in 2021 of Doosan Infracore – whose construction brand is now known as Develon – has paid off, thanks to increased operating profits over the past two years.
HD Hyundai Infracore, which encompasses the former Doosan Infracore, posted financial results October 25 that showed an operating profit of 20% year over year. The company’s name was changed to HD Hyundai Infracore in March. The chart below shows the new names for the company and related businesses:
HD Hyundai
HD Hyundai Infracore’s total profit since acquisition has reached 83.3 billion won over purchase price, which translates into about $61.6 million.
Steady Growth
In its third-quarter financial report, HD Hyundai Infracore attributes part of its 20% annual increase in profitability to steady growth in North American infrastructure investment.
It has also seen growth due to urban redevelopment in Europe and expansion of engine sales. Sales in developed markets rose 12% year over year.
A weak spot for construction equipment sales has been in emerging markets in China, Korea and Southeast Asia, where sales dropped 17% in the past year.
Overall, total sales dropped 8.6%. But construction equipment remains a bright spot for the company.
“Despite declining sales and increased costs, operating profit in the construction equipment division grew 40% compared to the same period last year following increased selling prices and strengthened profitability in North America, Europe and emerging markets,” states HD Hyundai Infracore’s news release.
“Despite the global trend of retrenchment, demand for construction equipment in emerging markets including North America and resource countries is growing steadily. We will gradually expand our market share in these regions through customized strategies for each region.”
HD Hyundai Construction Equipment
As for sister company HD Hyundai Construction Equipment, sales in the third quarter rose 6.2% compared to the same period last year, but the operating profit dropped 1.4%.
The company attributes the lower profit rate to “investment in more active new market development, strengthening of technology development in accordance with environmental regulations, and new product development reflecting local customer demand has doubled compared to the same period last year.”
“Investments have shrunk and market growth has slowed somewhat due to the continued high interest rate trend,” the company says, “but meaningful results have been achieved through increased sales prices and improved logistics as well as market diversification by expanding sales to emerging markets such as the Middle East and Africa.”
