HL Mando posted a record quarterly revenue by expanding sales of electric vehicle and automotive electronics parts in China, India and Europe. Despite rising semiconductor and raw material costs, the company maintained operating profit above 100 billion won by increasing the share of high-value electronics components.
HL Mando disclosed Thursday that its consolidated second-quarter sales reached 2.5 trillion won ($1.7 billion), up 3.9 percent from the same period last year. Operating profit rose 2.8 percent to 107 billion won. Compared with the first quarter, sales climbed 7.9 percent and operating profit increased 14.4 percent.
The operating profit margin held steady at 4.3 percent, unchanged from a year earlier.
Although semiconductor and raw material costs weighed on results, growth in emerging-market sales, improved profitability in European operations and cost-recovery efforts helped offset the pressure. A higher share of electronics products — including the IDB2 integrated electronic brake and the R-EPS electric power steering system — also supported margins. Electronics products accounted for 66 percent of total second-quarter sales.
India and Europe stood out as the strongest regional performers. India sales rose 17.7 percent year-on-year to 265.7 billion won, driven by higher output at Hyundai Motor Company and Kia as well as local automakers, and by growing demand for advanced driver assistance systems (ADAS) following tighter safety regulations.
European sales climbed 16.5 percent to 237.2 billion won, a quarterly record, on the back of increased shipments to European automakers and North American electric vehicle manufacturers.
China sales also grew 10 percent to 534.4 billion won. The increase reflected higher component shipments to North American EV makers, a larger share of new-energy vehicle customers including Chinese EV manufacturers, and new revenue from high-performance computing units that integrate multiple vehicle control functions.
Domestic sales fell 2.3 percent to 802.5 billion won as Hyundai Motor and Kia reduced production. Sales in the Americas slipped 1.4 percent to 655.5 billion won due to lower output at North American automakers and at Hyundai Motor and Kia, though expanded production in South America partially offset the North American decline.
Net profit growth far outpaced sales and operating profit gains. Net profit for the period came in at 58.8 billion won in the second quarter, up 493.9 percent from a year earlier. Pre-tax profit also surged 171.8 percent to 92.7 billion won.
The improvement was largely driven by a swing in foreign exchange results. HL Mando recorded a foreign exchange loss of 37.1 billion won in the second quarter of last year but posted a gain of 4.3 billion won in the same period this year. Net profit attributable to owners of the parent company jumped 1,093.7 percent year-on-year to 53.6 billion won.
For the first half of the year, cumulative sales reached 4.81 trillion won, up 2.9 percent from a year earlier. Operating profit for the period rose 9.4 percent to 200.6 billion won, while net profit for the period expanded 151.2 percent to 111.9 billion won.
New orders continued to build a pipeline for future revenue. HL Mando secured 3.1 trillion won in new orders during the second quarter, bringing the first-half total to 5.8 trillion won — 44 percent of its full-year target of 13 trillion won. The order backlog as of the end of June stood at 59 trillion won.
Among first-half new orders, Chinese automakers accounted for the largest share at 36 percent. Hyundai Motor and Kia followed at 33 percent, Indian customers at 14 percent, North American customers at 12 percent, and European and other customers at 5 percent. Electronics products — including braking, steering, suspension and ADAS components — made up 71 percent of total orders.
Key orders included electronic parking brakes and suspension systems for new Hyundai Motor and Kia models in North America, and brake systems for North American automakers. From Chinese customers, the company won orders for IDB2 and other braking products, electric power steering systems and electronically controlled suspension systems. HL Mando also secured a contract to supply mechanically controlled suspension systems for robotaxis developed by a Chinese IT company.
Beyond automotive parts, HL Mando is expanding into robotics and software. The company is developing a rotary integrated actuator for humanoid robot joints and is in discussions with domestic and overseas robotics firms on product specifications. Its arc and overheat detection sensor "e-Hatch," designed to prevent electric fires, is set to enter mass production in the second half of this year.
The company is also pursuing a business to sell chassis integrated control and autonomous driving software as standalone products. It aims to complete 10 software technology validations and six mass-production projects this year, with plans to extend applications to aviation, energy and robotics in the future.
In India, HL Mando is restructuring its operations to deepen ties with local partners. HL Klemove, the company's autonomous driving subsidiary, plans to sell a 30 percent minus one share stake in its Indian unit to Gabriel India, a local automotive parts maker, for $98.44 million. HL Mando said it intends to strengthen its competitiveness in the Indian market alongside its local partner even after the stake sale.
kwater@heraldcorp.com
