Hyundai Rotem posts 13% sales growth in Q2, order backlog tops W30tr for first time

Hyundai Rotem sustained its sales growth in the second quarter, driven by defense export production. Operating profit dipped slightly, but the company's order backlog surpassed 30 trillion won ($20.4 billion) for the first time, broadening its medium- to long-term growth foundation.

Hyundai Rotem disclosed Friday that it recorded consolidated sales of 1.61 trillion won and operating profit of 232.4 billion won in the second quarter. Sales rose 13.3 percent year on year, while operating profit fell 9.7 percent.

Compared with the previous quarter, both sales and operating profit improved. Second-quarter sales climbed 10.2 percent from the first quarter, and operating profit rose 3.7 percent. Net profit for the period came to 186.3 billion won, down 1.8 percent from a year earlier.

For the first half, cumulative sales reached 3.06 trillion won and operating profit totaled 456.6 billion won — up 18.1 percent and down 0.8 percent, respectively, from the same period last year. Cumulative net profit for the period rose 12.2 percent to 388.9 billion won.

Defense export production drove the sales expansion. "We have maintained solid sales growth through continued production of defense export volumes, and plan to sustain medium- to long-term growth by pursuing export diversification," a Hyundai Rotem official said.

South Korean defense companies are facing simultaneous demands to expand production capacity and ensure supply stability on the back of large-scale export contracts, and Hyundai Rotem is reinforcing its earnings base with defense and rail as twin pillars. The growth in order backlog — rather than near-term results — is drawing attention as a key indicator of future revenue visibility.

Hyundai Rotem's order backlog stood at 30.4 trillion won as of the end of the second quarter, the first time it has exceeded 30 trillion won. By segment, the AD&RH (aerospace, defense, robot and hydrogen) division accounted for 9.82 trillion won, while the RS (rail systems) division accounted for 19.87 trillion won.

Major orders secured in the first half included a 748.2 billion won contract for maintenance of electric multiple units in Morocco, a 491.1 billion won project for rolling stock on Ho Chi Minh City Metro Line 2 in Vietnam, and a 198.5 billion won contract for K1 armored vehicle bridge maintenance. New orders flowed in from both overseas and domestic clients across the rail and defense segments.

The company's financial structure remained stable. Its debt ratio stood at 169 percent as of the second quarter, but falls to 50.4 percent when advance payments are excluded. Borrowings totaled 135.5 billion won, while cash and cash equivalents reached 2.53 trillion won.

Hyundai Rotem said it plans to strengthen business stability even amid heightened external uncertainty, drawing on its solid financial footing. With the order backlog at a record high, the company also intends to sharpen its capabilities in defense exports and global rail projects to improve profitability.