Hyundai Rotem posts W247.1b operating profit in Q3, order backlog nears W30tr

Hyundai Rotem reported preliminary third-quarter sales of 1.62 trillion won ($1.21 billion) and operating profit of 247.1 billion won, the company disclosed Monday.

Sales edged up 0.1 percent from the same period last year, while operating profit fell 11.0 percent. The operating margin stood at 15.3 percent. On a cumulative basis through the third quarter, sales rose 11.2 percent to 4.68 trillion won, while operating profit declined 4.7 percent to 703.7 billion won.

"We maintained solid sales growth by continuing to produce defense exports," the company said, adding that it plans to pursue export diversification to sustain medium- to long-term growth.

The order backlog as of the end of the third quarter reached 29.14 trillion won, approaching the 30 trillion won mark. By segment, the defense, aerospace, robot and hydrogen division posted 9.52 trillion won, the rail and systems division 19.03 trillion won, and the eco-plant division 588.2 billion won.

During the quarter, Hyundai Rotem secured notable wins in the global rail market, including a 344.5 billion won contract for the Taoyuan Brown Line project in Taiwan and a 310.3 billion won rolling stock maintenance contract with Singapore's Land Transport Authority.

The debt-to-equity ratio at the end of the quarter stood at 148 percent, or 42.6 percent excluding advance payments and contract liabilities. Borrowings totaled 145 billion won, while cash and cash equivalents amounted to 1.88 trillion won.

Hyundai Rotem said it will maintain a stable financial structure to strengthen management resilience amid heightened external uncertainty.

Meanwhile, Hyundai Rotem's board convened Monday and approved a business transfer agreement to acquire Hyundai Wia's special business division for approximately 358.4 billion won ($267 million). The acquisition will allow Hyundai Rotem to build an integrated production system covering complete weapons systems such as tanks as well as key components including main guns and gun barrels.

Through the deal, Hyundai Motor Group's defense business will be reorganized around Hyundai Rotem. Hyundai Wia plans to channel the proceeds from the sale into future mobility businesses, including thermal management and robotics.