Hyundai Rotem reported Q2 operating profit of 232.4 billion won, falling 19.6% short of market consensus of 289.1 billion won, according to a disclosure on the 24th. The company's Q2 revenue reached 1.606 trillion won, up 13.3% year-over-year, driven by continuous production of defense export volumes. Despite the earnings miss, Hyundai Rotem's order backlog surpassed 30 trillion won for the first time in company history, reaching 30.4 trillion won.
Hyundai Rotem Reports Q2 Operating Profit 19.6% Below Consensus
Hyundai Rotem's Q2 consolidated revenue totaled 1.606 trillion won with operating profit of 232.4 billion won on a preliminary basis. Compared to the same period last year, revenue increased 13.3% while operating profit decreased 9.7%. The results fell short of analyst expectations across both metrics. Yonhap Infomax compiled consensus from four major domestic securities firms that provided Q2 forecasts within the past month, projecting consolidated revenue of 1.718 trillion won and operating profit of 289.1 billion won. The actual operating profit came in 19.6% below the forecast.
Stock Price Drops 5.77% Following Earnings Announcement
Hyundai Rotem's stock price declined sharply after the earnings release. At 1:49 PM, the stock hit an intraday low of 156,900 won, down 5.77% from the previous day's close. Prior to the announcement, the stock had been trading around the previous closing price of 166,500 won.
![Hyundai Rotem intraday stock price movement on the 24th]()
Hyundai Rotem intraday stock price movement on the 24th [Source: Yonhap Infomax screen number 3111]
Order Backlog Exceeds 30 Trillion Won for First Time
Hyundai Rotem's Q2 order backlog, which indicates available work volume, set a new company record. The Q2 order backlog reached 30.4 trillion won, marking the first time since the company's founding that the figure surpassed 30 trillion won. By segment, the Railway Systems (RS) division recorded an order backlog of 19.8 trillion won, while the AD&RH division—covering defense, robotics, hydrogen, and other future businesses—recorded 9.8 trillion won. Major orders secured in the first half included Morocco electric train maintenance (748.2 billion won), Vietnam Ho Chi Minh Line 2 electric trains (491.1 billion won), and K1 bridge vehicle maintenance (198.5 billion won).
![Hyundai Rotem order backlog]()
Hyundai Rotem order backlog [Source: Hyundai Rotem]
First-Half Revenue Reaches 3.063 Trillion Won
Cumulative first-half revenue increased 18.1% year-over-year to 3.063 trillion won, while operating profit decreased 0.8% to 456.6 billion won.
Debt Ratio Maintained at 169% with Strong Cash Position
Hyundai Rotem maintained a stable financial structure as of Q2. The debt ratio stood at 169% (50.4% excluding advance payments). Cash and cash equivalents approached 2.527 trillion won, while borrowings were managed at approximately 135.5 billion won. The company stated it "maintained solid revenue growth due to continuous production of defense export volumes and plans to pursue export diversification for mid- to long-term growth."
FAQ
Why did Hyundai Rotem's Q2 operating profit fall below market expectations?
Hyundai Rotem's Q2 operating profit of 232.4 billion won came in 19.6% below the market consensus of 289.1 billion won compiled from four major securities firms. While revenue increased 13.3% year-over-year to 1.606 trillion won, operating profit decreased 9.7% compared to the same period last year.
What is Hyundai Rotem's current order backlog?
Hyundai Rotem's Q2 order backlog reached 30.4 trillion won, exceeding 30 trillion won for the first time in company history. The Railway Systems division accounted for 19.8 trillion won, while the defense, robotics, and hydrogen division recorded 9.8 trillion won. Major first-half orders included Morocco electric train maintenance (748.2 billion won), Vietnam Ho Chi Minh Line 2 electric trains (491.1 billion won), and K1 bridge vehicle maintenance (198.5 billion won).
