Hyundai Heavy Holdings, 1Q Operating Profit 534.3 Billion KRW... Quarterly Record High

[Asia Economy Reporter Choi Dae-yeol] Hyundai Heavy Industries Holdings announced on the 29th that its consolidated operating profit for the first quarter of this year reached 534.3 billion KRW, turning profitable compared to the same period last year. The operating profit is the highest quarterly figure since the company's establishment. The previous record was 519.2 billion KRW in the third quarter of 2017.

First-quarter sales amounted to 6.0755 trillion KRW, up 6.3% from the same period last year and 31.8% compared to the previous quarter. The company stated, "We posted solid results across all sectors including shipbuilding, refining, and construction equipment," adding, "In particular, Hyundai Oilbank in the refining sector and Hyundai Construction Equipment in the construction equipment sector led significant performance improvements with a combined operating profit of 492.5 billion KRW."

Hyundai Oilbank recorded an operating profit of 412.8 billion KRW due to rising oil prices driven by demand recovery, improved refining margins, and favorable conditions in the lubricants market. It turned profitable after posting a large loss in the first quarter of last year.

Hyundai Construction Equipment diversified its product lineup and expanded its sales network, increasing sales volume in emerging markets such as China and India. The operating profit of 79.7 billion KRW is the highest quarterly figure since the company's establishment. Hyundai Electric posted an operating profit of 17.5 billion KRW, despite a slight decrease in domestic sales compared to the previous quarter, thanks to improved profitability of its U.S. subsidiary. This marks five consecutive quarters of profitability. Hyundai Global Service also recorded an operating profit margin of 10%, generating an operating profit of 23.7 billion KRW.

In the shipbuilding sector, the intermediate holding company Korea Shipbuilding & Offshore Engineering posted an operating profit of 67.5 billion KRW in the first quarter, down 44.5% from the same period last year. However, it turned profitable compared to the fourth quarter of last year. The increase in ship prices reduced the provision for losses on new ship orders, and increased sales helped reduce fixed cost burdens. Sales reached 3.6815 trillion KRW, up 3% from the previous quarter, supported by increased shipbuilding volume in the shipbuilding division.

A company official explained, "Expectations for the post-COVID-19 era influenced the group’s solid performance in its major businesses such as shipbuilding, refining, and construction equipment."