HDC Hyundai Development Company recovered its quarterly operating profit to the 100 billion won range in the second quarter of this year, after reshaping its business portfolio around its own development projects and prime large-scale sites.
HDC Hyundai Development said in a regulatory filing on the 23rd that its preliminary operating profit on a consolidated basis for the second quarter came to 122.7 billion won, up 52.9% from a year earlier. The figure also rose 53.1% from 80.1 billion won in the previous quarter. It marks the first time in about five years that quarterly operating profit has exceeded 100 billion won.
Revenue for the same period fell 21.4% year-on-year to 914.6 billion won, but rose 35.7% from 673.9 billion won in the previous quarter. Net profit was 83.7 billion won, up 58.9% from the same period last year and 69.8% from the previous quarter.
Profitability indicators also improved. The second-quarter operating margin was 13.4%, marking a double-digit figure for two consecutive quarters following the first quarter. Cumulative operating profit for the first half was 202.9 billion won, up 51.1% from a year earlier. Cumulative first-half revenue fell 23.2% to 1.5886 trillion won, but cumulative net profit rose 24.4% to 133 billion won.
"Profitability improved significantly through improved cost ratios and a business portfolio centered on high-margin own development projects and prime large-scale sites," an HDC Hyundai Development official said. "Thorough cost management and a selective order strategy focused on prime sites are leading to stable profitability."
For the second half, the company expects earnings contributions to begin in earnest from its own development projects, including Seoulwon I'Park, and from large-scale sites such as Cheonan I'Park City and Unjeong I'Park Forest. "In the second half as well, we will maintain a stable operating margin based on the trend of improving cost ratios and earnings contributions from our own development projects and prime large-scale sites," an HDC Hyundai Development official said. "We plan to continue profitability-focused qualitative growth."
