Daedong, "earning surprise" with their profit in the first half of 2022
"Year-on-year sales increased 28.2% and operating profit increased 35.1%"
-Sales and operating profit in the first half of the year increased by KRW 814.2 billion and KRW 67.7 billion, going beyond the forecast and reaching the highest record ever
-Internalization of the main three future businesses going well, and maximizing the sales by smartizing agricultural machines for improved technology, production, quality, and export
-Pursuing to be the best in the nation and one of the tier 1 groups in the US in the second half of this year and expanding the boundary of the group with mobility business.
The leading company of future agriculture, Daedong (CEO Joon-Sik Kim, Yu-Hyun Won), the parent corporation of Daedong Group, announced on the 16th that they have reached their all-time highest sales record with sales and operating profit in the first half of the year increased by KRW 814.2 billion and KRW 67.7 billion, compared to the ones in the same period last year.
This is the "earning surprise" that the sales go beyond the market expectations of KRW 764.8 billion in sales and KRW 55.4 billion in operating profit. The consolidated sales in the second quarter were KRW 457.4 billion in sales and KRW 46.1 billion in operating profit, which has reached its highest record for quarterly sales of all time.
Since 2020, Daedong has started the "Digital Transformation" process for the top three future businesses and internalized this into the organization of the corporation and management system. As a priority, they implemented "smartization of the existing agricultural machine business", from product development and manufacturing to sales and service, which led to the highest sales record with improved competency, as analyzed.
In relation to this, the sales of the overall domestic agricultural machine market in the first half of this year have declined by 7.9% compared to the same period last year, based on the government's agricultural machine loan record. However, Daedong’s total sales of finished agricultural machines, such as tractors, combines and rice-planting machines, have increased by 11%. Having been implementing "smartization of agricultural machines", Daedong provides various special customer services, such as "Connect", the remote-control service for agricultural machines, and the industry's first 10-year free tractor warranty, and makes large products with high technology, which leads to constant growth of the corporation.
In fact, the premium tractor HX (with a horsepower of 100 to 140), with various high-technology functions such as Connect, automatic driving, and power shift, that they launched last year, quickly took over the market and made the corporation’s profit increase by 30% in the first half of this year. Also, with the gradually increased sales of the steady-seller model RX (with a horsepower of 60 to 80) newly applied with Connect service this year, the total sales of medium and medium-large size tractors with a horsepower of between 60 and 140 in the first half of this year have increased about 17% compared to the same period last year.
Despite the increased selling price for 70 exporting countries in the second quarter of this year, sales kept increasing due to customer preferences and loyalty towards KIOTI. In addition to that, with the amicable exchange rate, the foreign sales in the first half of this year KRW 524.6 billion in total, which is 42% higher than last year. All of this resulted in the highest sales record ever. Daedong is redesigning its own ERP(Enterprise Resource Planning) system and MES(Manufacturing Execution System) and shifting the plant in Daegu to a smart factory for advanced production and product quality. Also, strategic diversification of the supply chain from the parts to the foreign logistics contributes to improved quality and an advantage in production costs, which also affected the increased profitability, as analyzed.
Starting from the second half of this year, they will gradually implement the strategy to become the absolute top M/S in the country and one of the tier 1 groups in the US. They will expand the product lineup by launching a new 20-60 horsepower tractor, a new model of HX tractor with better commercial value, diesel driving lawn mower, and a skid loader(small construction equipment), in and out of the country. The advanced smart factory will also help maximizing the flexibility and efficiency of production to be a production system manufacturing 60,000 tractors per a year. Additionally, they will maximize the sale of parts and service by starting the extra-personalized customer management program based on the Connect service, in accordance with the increasing tractor supply in and out of the country. They will also reinforce the sales and marketing of mobility businesses in and out of the country, starting with the golf course management business, to expand not just Daedong but the entire Daedong Group.