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Heavy machinery

Korea’s heavy machinery makers continue strong performance in Q2

Strong H1 results are largely driven by higher demand in emerging markets including Russia and Latin America

By Jul 23, 2021 (Gmt+09:00)

Hyundai Construction Equipment’s excavators.
Hyundai Construction Equipment’s excavators.

Korean construction and heavy equipment manufacturers have posted strong results in the second quarter, maintaining the trend of recovery from the first quarter.

According to the industry on July 23, Hyundai Construction Equipment Co. (Hyundai CE) had a total of 12,703 units of orders yet to be delivered to its clients, the highest figure since 2018, as the current demand is much higher than its supply capacity.

Hyundai CE’s revenue in the second quarter recorded 755.8 billion won ($657 million), increased by 46.3% from the same period in 2020.

“There are far more number of orders than our current capacity. It will take another 6 months to fully deliver the 12,703 units,” said a Hyundai CE official.

Looking at the first half of 2021, Hyundai CE’s operating profit was 150.4 billion won ($130.7 million), up 64% from the same period last year.

Another leading heavy machinery maker Doosan Infracore is also expected to post strong results. Daishin Securities estimated that the company in the second quarter will report an operating profit of 249 billion won ($216 million), up by 61.4% from 2020, on revenue of 2.3 trillion won ($2 billion).

Industry analysts highlighted that the two Korean manufacturers are recovering fast from the pandemic-hit year of 2020 thanks to strong demands in emerging markets including Russia and Latin America. Hyundai CE’s second-quarter revenue generated in emerging markets increased by 149% from the same period in 2020.

The analysts added that the second-quarter outlook for the country’s construction and heavy equipment industry is still positive.

“With China resuming a number of large-scale public construction projects from the second half, the Korean manufacturers are likely to post strong earnings into the second half of this year,” said a market analyst.

Hyundai Construction Equipment’s forklift model.
Hyundai Construction Equipment’s forklift model.

Meanwhile, the heavy machinery makers are gradually launching eco-friendly initiatives for long-term sustainability. Hyundai CE, for instance, will develop and commercialize a forklift powered by hydrogen fuel cells.

Write to Jeong-min Nam at peux@hankyung.com

Daniel Cho edited this article.

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