[Click eStock] "HD Hanguk Chosun, Profit Increase from Productivity Improvement... Shareholder Returns Up"

On the 1st, Korea Investment & Securities forecasted that HD Hyundai Heavy Industries' profits will increase significantly due to productivity improvements at its affiliated shipbuilding companies, leading to a substantial rise in shareholder returns.

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HD Hyundai Heavy Industries recorded sales of 6.2458 trillion KRW and an operating profit of 398.4 billion KRW in the third quarter of this year. These figures represent increases of 25% and 478%, respectively, compared to the same period last year. Sales were in line with market expectations, while operating profit exceeded forecasts by about 11%.

Researcher Kyungtae Kang of Korea Investment & Securities stated, "The productivity of the three affiliated shipbuilding companies?HD Hyundai Heavy Industries, HD Hyundai Mipo, and HD Hyundai Samho?has all improved," adding, "They secured orders evenly across ship types and prices, resulting in simultaneous growth in both scale and profitability."

Researcher Kang explained, "In July, HD Hyundai Marine Engine (formerly STX Heavy Industries) acquired a 35.05% stake, becoming the largest shareholder, which increased consolidated affiliate performance," and added, "The two months of performance from HD Hyundai Marine Engine, which manufactures low-speed engines for ship propulsion, turbochargers, and crankshafts in-house, were reflected in the engine machinery division."

He analyzed, "A one-time gain of 6 billion KRW occurred in the shipbuilding division due to a drop in steel prices, and an additional 23.8 billion KRW profit was reflected in the offshore division through change orders (C/O), including increased construction costs."

He continued, "By December, the company plans to disclose a shareholder return strategy through a value-up plan," adding, "Shareholder returns will be made at around 30% based on dividends and total shareholder return (TSR) through share buybacks and cancellations."