From BigGo Finance · BigGo Finance · · 1m 40s
Hyundai Rotem Q3 Profit Down 10% Despite Defense Margin Recovery
Hyundai Rotem's Q3 profit fell 10% as defense margin rebounds, but order gap stalls growth.
In brief
Hyundai Rotem's Q3 profit fell 10% as defense margin rebounds, but order gap stalls growth. Hyundai Rotem reported Q3 operating profit of 247.1 billion won (down 10%) while defense margin recovered to 28.1% amid order gaps. Originally reported by BigGo Finance.
Hyundai Rotem Q3 Results
Hyundai Rotem reported third-quarter revenue of 1.6207 trillion won (approximately $1.2 billion) and operating profit of 247.1 billion won (approximately $186.3 million).
Profit Misses Market Expectations
Operating profit fell 11.0% from a year earlier, missing the market consensus by 10.5%.
Key Causes of Profit Drop
A weaker dollar-won exchange rate and the absence of large export orders following the second Poland K2 tank contract were cited as the main causes.
Defense Margin Rebound
The defense division's operating margin rebounded to 28.1% after two quarters of decline.
Order Backlog Status
The order backlog held at 29.142 trillion won (approximately $22.0 billion).
Acquisition Plan
Hyundai Rotem plans to acquire Hyundai Wia's special-purpose machinery division for 358.4 billion won (approximately $270.2 million).
Export Order Gap
Defense new orders so far this year total 344.5 billion won (approximately $259.7 million), effectively stalled compared with 9.1391 trillion won (approximately $6.9 billion) in the same period last year.
Next Contract Focus
Hyundai Rotem is in export negotiations with Romania, Peru and Iraq, but the timing is hard to pin down.
Market Reaction
Hyundai Rotem shares plunged 37% over the past three months and 63% since early May.
Future Outlook
Whether Hyundai Rotem rebounds depends on when it secures its second major export contract after Poland.
The key point
Hyundai Rotem reported Q3 operating profit of 247.1 billion won (down 10%) while defense margin recovered to 28.1% amid order gaps.
