Market Cap Surges Tenfold, ROE Turns Positive
Transformation Centered on Defense and LNG Spurs Growth
Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering), acquired by Hanwha Group, has achieved the most outstanding management performance among large-scale mergers and acquisitions (M&A) valued at over 500 billion KRW in the past decade.
On July 22, according to Leaders Index’s evaluation of shareholder value for 20 companies acquired by Korea’s top 30 conglomerates since 2015, Hanwha Ocean showed the most remarkable growth, with sales, market capitalization, and equity capital all increasing by more than 100%.
Hanwha Ocean’s sales rose by 140%, from 4.4 trillion KRW at the time of acquisition in 2023 to 10.7 trillion KRW, while its market capitalization surged more than tenfold, from 2.36 trillion KRW to 25.86 trillion KRW. The return on equity (ROE) also improved from -17% to 9.7%.
Hanwha attributed these achievements to restructuring and financial stabilization. After the acquisition, the company carried out a paid-in capital increase of approximately 1.5 trillion KRW, expanding its capital base by seven times. The debt ratio, which had reached 1,800%, dropped to the 200% range as of the end of the third quarter last year.
In terms of business strategy, Hanwha Ocean strengthened its focus on selective, profitability-oriented order intake, achieving orders worth 9 billion USD last year. This marks the highest order volume ever recorded by a Korean shipyard. This year, the company plans to build a record 25 LNG carriers.
Productivity has also improved. Although productivity declined immediately after the acquisition due to a subcontractor union strike in 2022, Hanwha Ocean successfully returned to profitability last year through management restructuring and organizational realignment. The company explained that shifting production to focus on high value-added vessel types contributed to the recovery in profitability.
The defense sector is also noteworthy. Hanwha Ocean has proven its competitiveness by securing consecutive contracts for surface ships and submarines, including the Ulsan-class frigate Batch-III, Batch-IV, and Jangbogo-III Batch-II programs. The company also became the first in the Korean shipbuilding industry to win three consecutive contracts for maintenance, repair, and overhaul (MRO) projects for U.S. Navy vessels.
A Hanwha official stated, "Since September last year, we have begun constructing an indoor outfitting factory that will allow us to build two surface ships simultaneously. We plan to introduce a block enlargement process using a 900-ton Goliath crane and two 300-ton cranes, which will reduce assembly and outfitting times." The official added, "We will also expand cooperation with global defense companies to enhance our competitiveness in overseas markets."
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