Helped by improved profitability in its industrial machinery business, Hyosung Corp. has raised 248 billion won ($218.7 million) in operating profit for the third quarter, moving a step closer to achieve its annual operating income target of 1 trillion won.

The company announced in a regulatory filing on Tuesday that its operating profit on a consolidated basis came at 248 billion won in the July-September period, down 10.6 percent from a year earlier while sales dropped 11.6 percent to 2.84 trillion won. It, however, swung to a net profit of 197 billion won from 8.6 billion won net loss a year ago.

Despite the on-year fall in operating profit and sales, the company posted a record high cumulative operating income for the first three quarters of this year that came at 801.3 billion won, raising expectations that the company would meet a 1-trillilion won target in annual operating profit for the first time since its inception. The South Korean conglomerate, which specializes in general trading business and produces synthetic textiles and chemical products, as well as industrial machinery, reported an annual operating income of 950.2 billion won in 2015, falling short of the target.

An unnamed senior official at Hyosung also said that the company is expected to rake in 1 trillion won in operating profit this year under the current positive business trend.

The company’s profit has been on a steady increase on stable annual sales that have been hovering around 12.5 trillion won. The company official said the increase in its operating profit has been mainly driven by improved profitability in its heavy industries business that has been actively seeking orders that could generate higher profitability, shifting away from any low-profitable orders that the company once relied on to expand sales in the past. The adoption of advanced technology and reduced defect rates have also contributed to the steady rise in the company’s operating income, the official added.

Hyosung is optimistic that its operating profit for the fourth quarter would surpass 159.6 billion won recorded a year ago, citing high seasonal demand in the textile and heavy industries sectors. Another official from Hyosung said its core businesses spanning from spandex, tire cords, and transformers are expected to fare well in the remaining months of the year.

By Kang Young-woon

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