HD Hyundai Infracore posted a 6.7% operating profit margin in the first quarter, up from the previous period despite declining sales, as the Korean manufacturer implemented price increases and cost-cutting measures amid weak demand in advanced markets.
The construction equipment maker reported sales of 1.02 trillion won ($749 million) and operating profit of 67.8 billion won ($50 million) for Q1, representing year-on-year declines of 12% and 27% respectively according to results announced Wednesday.
The company’s construction machinery segment, which accounts for nearly three-quarters of total revenue, recorded sales of 753.1 billion won ($553 million), down 11% from a year earlier. Operating profit in this division fell to 23.6 billion won ($17.3 million) as demand recovery stalled in North America and Europe.
HD Hyundai Infracore’s engine business posted better results despite a 14% drop in sales to 265.4 billion won ($195 million). The division achieved an operating profit of 44.2 billion won ($32.5 million) with a robust 16.6% margin, benefiting from increased high-margin product sales.
The company pointed to encouraging signs in Asia, noting “The Chinese market has grown for four consecutive quarters, and demand is gradually recovering in some emerging markets such as Southeast Asia and Africa.”
This performance comes as the manufacturer attempts to navigate a challenging global landscape while pursuing ambitious growth plans. HD Hyundai Group aims to elevate its construction equipment subsidiaries to become the world’s fifth-largest manufacturer by 2025, up from their current positions of 19th and 23rd in global rankings.
