S.Korea's Hanon Systems hits 'home run' with heat pump for EVs
Nan-Sae Bin
Aug 11, 2023 (Gmt+09:00)
Hanon Systems, a leading South Korean maker of automotive thermal management systems, posted surprising results in the second quarter in blowing away market forecasts.
This was thanks to growth in sales of high value-added parts for electric vehicles (EV) like heat pumps and enhanced profitability through lower logistical expenses and cost support.
Hanon Systems on Thursday announced second-quarter performance of 2.4 trillion won ($1.8 billion) in sales, up 15.3% year on year, and 143.5 billion won in operating profit, a 138.8% surge. The sales figure was a company record for a quarter, operating profit exceeded the average market estimate of 98.2 billion won by 46.1% and net profit jumped nearly 800% to 110.6 billion won.
"Reduction in output due to semiconductor supply shortages eased, logistical costs stabilized and expenses fell due to burden sharing with clients," a company source said. "But the biggest driver of the earnings improvement was sales growth of expensive EV parts."
Hanon Systems is recognized for its technology as it developed the world's first heat pump system for indoor air conditioning that recycles waste heat from batteries. This system is considered a key component of EVs as it can boost mileage through lower battery use.
The proportion of eco-friendly vehicle parts in Hanon Systems' sales last year rose to 25%, the highest among global makers in the sector. The company eyes boosting that figure to 40% by 2025.
In personnel moves, the company in a board meeting on Thursday also promoted Chief Financial Officer (CFO) Ramachandran Nagasubramony from senior vice president to president and co-CEO and President Nurdal Kucukkaya to co-CEO.
Formerly managing director of the company's heating, ventilation and air conditioning and systems division, Ramachandran will retain the CFO role. Managing Director and Executive Officer Jung Yong-soo, who heads the division, was also promoted to president of domestic operations and senior vice president.