HD Hyundai Electric continued its double-digit growth in the second quarter of this year, driven by increased demand for power equipment in key markets such as North America and Europe. The company plans to expand its data center business by negotiating supply agreements for power and distribution equipment with global tech giants.
On July 28, HD Hyundai Electric reported consolidated revenues of 1.1418 trillion won and an operating profit of 287 billion won for the second quarter. This represents a 26.0% increase in revenue and a 37.3% rise in operating profit compared to the same period last year.
The growth in revenue was fueled by increased sales of domestic and international power and distribution equipment. Although sales in the power equipment sector decreased from the previous quarter due to delivery schedules for transformers bound for North America, they still rose by 10.7% year-on-year. Sales of high-voltage circuit breakers continued to grow, particularly in overseas markets.
Sales of distribution equipment surged by 70.1% from the previous quarter, bolstered by increased deliveries for domestic semiconductor projects and approximately 20 billion won in sales from the Anjwa battery energy storage system (BESS).
Profitability also improved, with higher margins for power transformers in North America, Europe, and the Middle East. The profitability of all distribution equipment products expanded, particularly those aimed at the domestic semiconductor market. Increased high-margin shipments to the Americas and the impact of mutual tariff refunds also contributed to the rise in operating profit.
New orders in the second quarter totaled $1.44 billion, a 44.6% increase from the same period last year. The order backlog now stands at $8.49 billion, up 29.6% year-on-year.
During a conference call on the earnings announcement, Executive Director Hwang Jong-hyun stated, "We are currently negotiating for supply volumes that exceed existing contract sizes for deliveries from 2029 to 2030. We are also creating good opportunities in the low- and medium-voltage circuit breaker market for North American data centers and for generators and motors installed behind the power systems of data centers."
Hwang noted, "While I cannot disclose the names of the companies due to confidentiality, we are engaged in in-depth discussions with three major global tech firms. We expect the share of data center orders in our new power sector contracts to grow from 1.8% last year to 6.3% this year, and to 16% next year."
He added that the supply of generators for HD Hyundai Heavy Industries engines is expected to be secured in the third quarter, and that expanding new business opportunities centered around data centers will further strengthen the company's long-term growth foundation.
When asked whether the decline in high-voltage circuit breaker sales in the Middle East is related to the war in Iran, Hwang clarified that the fluctuations are temporary and related to delivery schedules for specific contracts. In the second quarter, sales in the Middle East fell by 19.7% from the previous quarter and by 25.4% year-on-year due to these delivery schedules.
Although the growth rate of orders in the Middle East has slowed somewhat due to localization policies, there are signs of gradual recovery through additional orders. HD Hyundai Electric is also maintaining a strategy of reallocating some production slots originally designated for the Middle East to Europe.
Hwang stated, "The gradual slowdown in the increase of orders in the Middle East due to localization policies has led us to shift some slots to Europe. However, we have secured additional orders at planned levels from clients who highly value our past performance for the ultra-high voltage direct current (HVDC) project we won last year, as well as for the second and third phases scheduled for this year. Orders in the Middle East are also gradually increasing compared to last year."
* This article has been translated by AI.
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