HD Hyundai Electric posts 15% rise in Q3 operating profit, plans W200b expansion at Cheongju factory

Sales reach 1.18 trillion won, up 18.5%

Q4 orders seen at 1.3–1.4 trillion won

Second investment of 198 billion won at Cheongju distribution campus

'Meeting AIDC power and distribution equipment package demand'

An aerial view of HD Hyundai Electric's factory in Ulsan. [HD Hyundai Electric]

HD Hyundai Electric said Tuesday its third-quarter sales reached 1.18 trillion won ($892 million) and operating profit came in at 284.5 billion won, up 18.5 percent and 15.1 percent, respectively, from the same period last year.

The company also announced a second-phase investment of around 200 billion won at its Cheongju distribution campus to meet demand from AI data centers.

This quarter's results were bolstered by the addition of battery energy storage system (BESS) revenue on top of existing distribution transformer and distribution equipment sales. HD Hyundai Electric signed a 181.2 billion won contract with Jumin Sandeulbaram Power in December last year to build a BESS power plant. Sales in the semiconductor distribution equipment and new business segments alone surged 85.8 percent year-on-year as a result.

New orders for the third quarter totaled $980 million, while the total order backlog grew 4.2 percent quarter-on-quarter to $8.84 billion.

Orders for the quarter were down 19.1 percent from a year earlier. A company official addressed the decline during an earnings conference call Tuesday, saying the slowdown reflected capacity constraints rather than weakening demand. "It is not so much that orders have slowed — there are a considerable number of cases where we simply cannot take on orders because our slots are full," the official said.

On the fourth-quarter outlook, the official said the company is targeting 1.3 trillion to 1.4 trillion won in new orders, with revenue expected to be driven primarily by distribution transformers while power transformer deliveries proceed according to contracted schedules. New supply agreements under discussion with major technology companies since the first half of this year are expected to be finalized around November, the official added.

A molded case circuit breaker (MCCB) production line at HD Hyundai Electric's distribution campus in Cheongju. [HD Hyundai Electric]

HD Hyundai Electric also disclosed its second-phase investment plan for the Cheongju distribution campus Tuesday. The company plans to invest a total of 198 billion won over the next 26 months to build a smart factory and expand production capacity. The investment is expected to generate an additional 250 billion won in annual sales.

The expansion targets growing demand for package orders — covering distribution equipment and more — tied to large-scale power infrastructure projects such as AI data centers. "Most of our customers are interested in distribution products alongside power transformers, so we make it a principle to pursue package negotiations as much as possible," a company official said.

"Long-term contracts in package form — supplying both power transformers and distribution equipment together — are expanding, particularly among major North American technology companies," the official said. "We will strengthen our differentiated competitiveness based on our integrated supply capabilities spanning power transformers, distribution transformers and distribution equipment, and further expand our presence in the global power infrastructure market."

klee@heraldcorp.com