"Performance Increase in Refining and Construction Machinery... Profitability-Focused Operations"
[Asia Economy Reporter Moon Chaeseok] Hyundai Heavy Industries Group offset losses in its shipbuilding division with strong performances in its refining and construction equipment sectors, recording the highest operating profit since the establishment of its holding company.
Hyundai Heavy Industries Holdings, the group's holding company, announced on the 7th that it posted consolidated sales of KRW 28.1587 trillion and an operating profit of KRW 1.0854 trillion last year. Sales increased by 48.9% compared to the previous year. This growth was driven by the refining sector benefiting from rising oil prices and the construction equipment sector from expanded global infrastructure investments. The operating profit marked the highest performance since the holding company's inception in 2017, overcoming provisions related to the ruling on ordinary wages.
In particular, Hyundai Oilbank in the refining sector led the holding company's strong results with sales of KRW 20.6065 trillion and an operating profit of KRW 1.1424 trillion. The rise in oil prices increased inventory effects and expanded product cracks (the price difference between crude oil and petroleum products) due to recovering demand for petroleum products.
Hyundai Construction Equipment recorded sales of KRW 3.552 trillion, the highest since its launch last year, and an operating profit of KRW 181.8 billion, a 98.5% increase compared to the same period last year. Hyundai Doosan Infracore, incorporated into the group in August last year, posted sales of KRW 1.6782 trillion and an operating profit of KRW 37.3 billion.
Hyundai Electric achieved sales of KRW 1.806 trillion and an operating profit of KRW 9.7 billion last year. Hyundai Global Service recorded sales of KRW 1.0876 trillion, a 7.8% increase from the previous year, driven by strong orders in eco-friendly ship retrofitting and ship parts service sectors amid tightened environmental regulations.
Korea Shipbuilding & Offshore Engineering posted sales of KRW 15.4934 trillion, a 4% increase from the previous year. This was influenced by increased shipbuilding volume due to a recovery in market conditions, including a rise in orders for eco-friendly ships. However, it recorded an operating loss of KRW 1.3848 trillion due to provisions related to the ordinary wage ruling and a surge in steel prices in the first half of last year. Hyundai Heavy Industries Holdings stated, "With orders exceeding the target by 52% last year and the effect of price increases reflected from the second half, performance is expected to improve."
Hyundai Heavy Industries, a shipbuilding subsidiary of Korea Shipbuilding & Offshore Engineering, recorded sales of KRW 8.3113 trillion, similar to the previous year. Hyundai Samho Heavy Industries posted sales of KRW 4.241 trillion, up 8.2% year-on-year, and Hyundai Mipo Dockyard recorded sales of KRW 2.8872 trillion, up 3.4% year-on-year.
A Hyundai Heavy Industries Holdings official said, "Last year, we resolved uncertainties by reflecting one-time costs, and with continued improvements in market conditions for core businesses such as shipbuilding, refining, and construction equipment, we expect strong performance this year as well. We will do our best to deliver stable results through profitability-focused business strategies and leading eco-friendly technology development."
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