HD Hyundai, the world’s largest shipbuilder and heavy industries conglomerate, released its 2023 Q2 financial results.
HD Hyundai reported a revenue of 15.6213 trillion won and operating profit of 472.6 billion won for the April-June period. The shipbuilding unit successfully marked a turnaround and other major businesses, including construction equipment and electric power devices, continued its robust earning trajectory. The oil refining unit saw a decrease in both revenue and operating profit due to the weakening market. As for the entire first half of the year, HD Hyundai reached 30.8953 trillion won in revenue and 1.006 trillion won in operating profit.
HD Korea Shipbuilding & Offshore Engineering (HD KSOE), the intermediate holding company of HD Hyundai, posted a revenue of 5.4536 trillion won, up 30.2% YoY, with the increase in shipbuilding volume and marine engines supply. It saw its operating profit amounted to 71.2 billion won, returning to profit. Operating profit is projected to further go up as profitability improvement will be reflected in the latter half of this year, resulting from increase in vessel prices.
HD Hyundai Oilbank, HD Hyundai’s oil refining unit, reaped 6.9725 trillion won in revenue and 36.1 billion won in operating profit. Product and raw material related inventory lost value due to the drop in global oil prices, and profitability lowered as complex refining margins went down due to continued tightening in reaction to global recession along with limited recovery in demand as a result of economic stagnancy indicators pointing towards China. As global oil prices and complex refining margins have recently staged a rebound, the operating profit of the second half year is expected to gradually improve.
HD Hyundai XiteSolution, HD Hyundai’s construction equipment unit, recorded 2.4072 trillion won in revenue and 270.9 billion won in operating profit. Revenue rose 13.7% YoY with an increase in demand following increased infrastructure investment in North American and European markets and expanded market shares in Indian and Southeast Asian markets. Its operating profit surged by 141.4% as a result of a rise in selling prices and improved global shipping.
HD Hyundai Electric saw its revenue at 642.5 billion won, up 19% YoY, with a steady growth across entire product groups as the market picks up, which increased demand for global electric power devices. In addition, its operating profit grew 116.2% YoY to reach 58.8 billion won as a result of its strategy to selectively take transformers orders and improved cost-to-sales ratio of rotating machines and switchgears.
HD Hyundai Global Service recorded 364.4 billion won in revenue and 54.8 billion won in operating profit driven by a sustained increase in highly-profitable ship parts and services and the eco-friendly ship retrofitting business. In particular, the sustainable ship rebuilding business is expected to show noticeable performance as there is growing demand for the reliquefaction reconstruction system of LNG carriers, for which HD Hyundai has recently won an order, and the LNG Floating Storage Regasification Unit (FSRU).
HD Hyundai Energy Solution posted 151.1 billion won in revenue, 7.9 billion won in operating profit, and HD Hyundai Robotics 49.3 billion won in revenue and 2.9 billion won in operating profit, turning to profit.
“HD Hyundai is expected to continue this stable profit momentum across the entire business units based on acceleration of profit improvement in shipbuilding, recovery of oil refining markets and solid performance of construction equipment and electric power businesses,” said an HD Hyundai representative. “We will lead the market by consistently developing sustainable and digital technologies and maintain steady performances by utilizing sales strategies that center on profitability.”