Iljin Electric's operating profit nearly doubles in Q3 on North American infrastructure orders

Iljin Electric posted sales of 637.6 billion won ($475 million) and operating profit of 70 billion won in the third quarter, the company announced Wednesday — gains of 41.6 percent and 98.3 percent, respectively, from the same period a year earlier.

The company attributed the earnings growth to a steady stream of orders across transformers, circuit breakers and cables, driven by aging power infrastructure in North America and Europe.

As of end-September, the order backlog stood at $2.25 billion. Heavy electrical equipment — including transformers and circuit breakers — accounted for about 69 percent of the total, with cables making up the remaining 31 percent. Overseas orders represented 72 percent of the backlog, with domestic orders at 28 percent.

Iljin Electric said it expects order momentum in power equipment and cables to continue into the fourth quarter. If the expansion of renewable energy generation that the US Democratic Party has signaled it will actively pursue moves forward, new demand for power grid infrastructure is likely to grow. In South Korea, projects such as the energy highway and mega infrastructure initiatives are expected to drive demand for power equipment and cables.

"As the Democratic Party has become the majority party in the US, there are concerns that tighter data center regulations could reduce transformer demand," a company official said. "However, all of our transformer orders in the United States are for ultra-high-voltage transformers used in power grid construction." The official added that distribution transformers connected directly to data centers are not part of the company's product lineup, and that the impact of data center regulations on the company is expected to be limited.