Hyosung Heavy Industries (298040) Q2 2024 earnings summary

Executive summary

• Sales revenue in 2Q 2024 reached KRW 1,193.8 billion, up 21.3% sequentially and 6.3% year-over-year, with operating profit at KRW 62.7 billion, an 11.6% increase from 1Q 2024 but a 26.8% decrease year-over-year.

• Net profit for 2Q 2024 was KRW 28.2 billion, up 12.1% from the previous quarter but down 9.6% year-over-year.

• Operates in two main segments: heavy industries and construction, with 24 consolidated subsidiaries as of June 30, 2024.

• Major business areas include transformers, circuit breakers, motors, gear units, and construction projects such as residential, commercial, and infrastructure developments.

• Recent achievements include the world's first commercialization of a 100% hydrogen engine generator and ongoing expansion in energy storage and hydrogen businesses.

Financial highlights

• Consolidated revenue for H1 2024 was ₩2,178.3 billion, with operating profit of ₩118.8 billion and net profit attributable to owners of ₩57.7 billion.

• Gross profit margin declined to 13.3% in 2Q 2024 from 14.4% in 1Q 2024 and 15.7% in 2Q 2023.

• EBITDA for 2Q 2024 was KRW 80.8 billion, up 11.6% sequentially but down 26.8% year-over-year.

• Cash and cash equivalents at period end were ₩277.8 billion.

• Net debt decreased to KRW 1,151.5 billion, with a net debt to equity ratio of 91.7%, improving by 4.9 percentage points from March 2024.

Outlook and guidance

• Overseas orders, especially in the US, Europe, and the Middle East, are continuously increasing, supporting future growth.

• The company is focusing on expanding global sales, especially in Asia, Europe, and the Americas, and strengthening its portfolio in renewable energy, hydrogen, and digital power solutions.

• Expansion of ultra-high voltage transformer capacity and new public project orders are expected to enhance profitability.

• Construction segment is diversifying into project management and private infrastructure investment, with new business lines in online sales and highway service areas.