Sales dip 0.03% to 2.32 trillion won
India revenue up 30.8%; South Korea down 8.6%
Cumulative orders reach 59% of annual target
HL Mando said Friday its third-quarter operating profit on a consolidated basis fell 45.3% from a year earlier to 51.5 billion won ($38.6 million), according to a regulatory filing.
Sales edged down 0.03% year-on-year to 2.32 trillion won. The operating profit margin came in at 2.2%, down 1.8 percentage points from the same period last year.
The company swung to a net loss for the period of 42.5 billion won, reversing from a profit in both the third and second quarters of last year. A foreign exchange loss of 61.4 billion won was the primary driver of the reversal.
The company attributed the earnings decline to higher costs from rising semiconductor and raw material prices. Increased research and development spending on new businesses and high-performance computing products at subsidiary HL Clemove also weighed on profitability.
Cumulative sales for the first three quarters of this year rose 1.9% year-on-year to 7.13 trillion won. Cumulative operating profit fell 9.1% to 252.1 billion won, while cumulative net profit declined 26.0% to 69.3 billion won.
By region, South Korea revenue fell 8.6% to 716.5 billion won, hurt by reduced domestic production and output disruptions at Hyundai Motor and Kia. China revenue slipped 1.7% to 494.7 billion won, as sales to local automakers declined, though growing supply to a leading North American electric vehicle maker partially offset the drop.
India revenue surged 30.8% to 282.5 billion won, driven by expanded shipments to Hyundai Motor, Kia and local automakers — a quarterly record, the company said. Revenue from the Americas rose 0.4% to 634.4 billion won, while European revenue grew 3.1% to 192.5 billion won.
New orders in the third quarter totaled 1.9 trillion won. Cumulative orders reached 7.6 trillion won, filling 59% of the full-year target of 13 trillion won. Electronics parts accounted for 76% of cumulative orders. By customer, cumulative order share broke down as follows: Hyundai Motor and Kia at 40%, Chinese automakers at 34%, Indian automakers at 12%, North American automakers at 10%, and European and other customers at 4%.
During the quarter, HL Mando secured contracts to supply braking and steering systems as well as advanced driver-assistance system components for major new Hyundai Motor vehicle programs in North America. The company also expanded electronics parts orders from local automakers in China and India. The order backlog at the end of the third quarter stood at 58 trillion won. The company said it expects to meet its full-year order target, as a concentration of major program awards is anticipated in the fourth quarter.
HL Mando is also expanding its electronically controlled suspension business. The technology adjusts a damper's damping force in real time to suit driving conditions. As of the end of the third quarter, the order backlog for the suspension business stood at 1.4 trillion won, with 10 customers and more than 40 vehicle models covered. New orders this year totaled about 706 billion won.
HL Mando projected that revenue from the suspension business will grow at an average annual rate of 25%, rising from 111 billion won last year to 342 billion won by 2030, as demand increases with the spread of electric vehicles and software-defined vehicles.
eyre@heraldcorp.com
