A second quarter year-on-year fall of 14.6% for the construction equipment segment of Hyundai Heavy Industries (HHI) has been reported, although there was a virtually unchanged figure for the second quarter of this year compared to the first three months.
The company said that the decrease was a result of fall in sales in the Chinese market, while domestic sales had increased.
During the April to June period, the HHI group – which includes other major segments including shipbuilding, and offshore and engineering – recorded KRW9.86 trillion (€7.90 billion) in sales, with operating profits for the first half of this year totalling KRW882.4 billion (€706.12 million).
HHI attributed operating profits for two consecutive quarters to “a series of drastic and comprehensive restructuring measures put in place since 2014 by the incumbent top management”, as well as strong performances from Hyundai Oilbank, its refining subsidiary.
The company said that the one-off cost of a voluntary retirement programme had been offset by factors such as the stabilisation of manufacturing processes for its offshore plant business.
It added, “Continued efforts to reduce material costs for non-shipbuilding businesses including engine and machinery, electro electric systems and construction equipment also played a role for the profits.”
The company added, “It is encouraging to post profits for two consecutive quarters but we still have a long way to go.
“Bearing in mind the 80% drop in new orders for our shipbuilding business for the first six months of this year, we will continue faithfully to implement the management improvement plan to facilitate sustainable performance.”
HHI’s board of directors has decided to sell Hyundai Finance Corporation and Hyundai Venture Investment Corporation as a part of the proposed management improvement plan.
It said that with the decision to dispose of all of its financial arms including Hyundai Futures, Hi Asset Management and Hi Investment & Securities, HHI would accelerate its business reorganisation efforts with much more focus on its core businesses