Sales Reach 6.77 Trillion Won, Operating Margin at 12.7%
Positive Impact from Exchange Rate Rise, Productivity Gains, and Product Diversification
Strong Shipbuilding Market and Green Engine Regulations Drive Growth
HD Korea Shipbuilding & Offshore Engineering, the intermediate holding company for HD Hyundai's shipbuilding division, recorded consolidated sales of 6.7717 trillion won and operating profit of 859.2 billion won in the first quarter of this year. These figures represent increases of 22.8% and 436.3%, respectively, compared to the same period last year. The company explained that its strong performance was driven by the shipbuilding and engine & machinery divisions. Looking ahead, the company expressed expectations for orders of LNG carriers related to U.S. liquefied natural gas (LNG) projects and announced plans to begin marketing for 2029 slots.
On April 24, HD Korea Shipbuilding & Offshore Engineering announced its first-quarter results, achieving a profit for the eighth consecutive quarter. Compared to the previous quarter, the fourth quarter of last year, sales decreased by 5.4% due to a reduction in the number of working days for seasonal reasons. However, operating profit increased by 72.1% as a result of improved productivity, an increase in construction volume, a higher proportion of sales from high-priced vessels, and profitability improvements through selective order intake. The rise in the exchange rate also had a positive impact on the results.
An artist's rendering of a nuclear-powered container ship applying the small modular reactor (SMR) technology unveiled by HD Hyundai Heavy Industries in February. Photo by Yonhap News
HD Hyundai Heavy Industries, a shipbuilding affiliate, posted sales of 3.8225 trillion won and operating profit of 433.7 billion won. HD Hyundai Samho and HD Hyundai Mipo also contributed to the improved performance of HD Korea Shipbuilding & Offshore Engineering, recording sales of 1.9664 trillion won and 1.1838 trillion won, and operating profits of 365.9 billion won and 68.5 billion won, respectively.
HD Korea Shipbuilding & Offshore Engineering evaluated that its ship engine affiliate, HD Hyundai Marine Engine, has generated synergy effects since joining the group last year. With increased engine volume and production efficiency, sales rose by 35.3% year-on-year to 83 billion won, and operating profit increased by 64.4% to 10.3 billion won.
During the earnings announcement, an official from HD Korea Shipbuilding & Offshore Engineering expressed optimism regarding orders for LNG carriers and LNG bunkering vessels. In particular, for LNG bunkering vessels, the company explained that while it previously relied mostly on outsourcing, its three shipbuilding subsidiaries have recently internalized production. The official also stated that the company has been working on a project with Palantir in the United States for over a year to improve productivity of LNG bunkering vessels, and that results may be seen this year or next year.
HD Korea Shipbuilding & Offshore Engineering plans to continue focusing on selective orders for high value-added vessels. A company official stated, "We aim to lead the future ship market through the advancement of digital and eco-friendly technologies, the establishment of smart shipyards, the development of autonomous navigation and SMR, and electrification technologies."
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