Third-quarter earnings
HD Construction Equipment increased its operating profit by more than 20% year on year in the third quarter of 2026, supported by higher sales of generator engines for data centers and improved profitability in its construction equipment business. Growing global demand for data center electricity improved engine business earnings, while construction equipment sales also rose in major overseas markets.
HD Construction Equipment announced on October 26 that it recorded consolidated third-quarter revenue of 2.0915 trillion won and operating profit of 157.7 billion won in 2026. Its operating margin was 7.5%. Compared with results for the same period in 2025, before its merger with HD Hyundai Infracore, on a basis assuming the merger had already occurred, revenue rose 6.1% and operating profit increased 23.9%.
By business, the construction equipment division recorded revenue of 1.6235 trillion won and operating profit of 109.9 billion won. Despite weakness in the Middle East and Africa, sales of medium-sized and large construction equipment increased in regions where demand for infrastructure investment and mine development continued. Higher product sales and improved profitability contributed to overall earnings growth.
Regional sales and engine demand
India and Latin America showed particularly strong growth. Revenue in India increased 26.6% year on year, while revenue in Latin America rose 26.8%. Revenue in the Commonwealth of Independent States (CIS) and Southeast Asia and Oceania also increased 30.2%, while North America and Europe recorded growth of 4%. Despite differences in regional demand, revenue expanded in major markets other than the Middle East and Africa.
The engine division benefited from rising data center demand. It recorded revenue of 394 billion won and operating profit of 55.2 billion won. Its operating margin was 14%, higher than that of the construction equipment division. Sales of generator engines needed to provide reliable electricity to data centers increased, while demand for industrial engines also rose as the global construction equipment market recovered.
Engine production expansion
The engine business's profitability is also linked to plans to expand production capacity. HD Construction Equipment plans to begin producing megawatt-class diesel generator engines at its new Gunsan plant in 2027 to meet data center electricity demand. At its Incheon plant, the company is pursuing an expansion of production lines for large gas engines.
The strategy is to respond to regional demand changes in construction equipment while expanding the engine business's production base to serve data center and industrial demand. Although the two divisions had different growth drivers in the third quarter, improved construction equipment profitability and higher engine sales both contributed to stronger earnings.
An HD Construction Equipment representative said, “We will strengthen our next-generation models and locally tailored construction equipment ranges, and expand our efforts in the data center generator engine market using our new Gunsan plant.”
Original Korean article: Straight News
English brief by Korea Wind Intelligence, koreawindintel.com
