HD Korea Shipbuilding & Offshore Engineering, the intermediate holding company for HD Hyundai’s shipbuilding businesses, said Thursday this year’s record first-quarter profit was largely fueled by robust demand for high-margin, eco-friendly vessels.
In the January-March period, HD KSOE’s revenue and operating profit surged year-on-year by 20.2 percent and 57.8 percent to 8.14 trillion won and 1.36 trillion ($5.61 billion and $938.9 million), respectively. Its profit also exceeded market expectations compiled by FnGuide by 14.8 percent.
The company said its stellar performance was primarily supported by high-margin eco-friendly vessels, enhanced productivity and improved profitability in the offshore business. Its engine and machinery segment also recorded strong profit, with rising demand for dual-fuel engines amid tightening global environmental regulations.
Among its subsidiaries, the newly integrated HD Hyundai Heavy Industries — launched following the merger with HD Hyundai Mipo in December — led overall growth, posting revenue of 5.92 trillion won, and operating profit of 905.4 billion won.
HD Hyundai Samho also maintained solid earnings momentum, reporting revenue of 2.12 trillion won and operating profit of 395.2 billion won, both up 8 percent year-on-year. HD Hyundai Marine Engine delivered particularly strong growth, with revenue and operating profit surging 60.8 percent and 216.5 percent to 133.5 billion won and 32.6 billion won, respectively.
HD Hyundai Energy Solutions witnessed a significant turnaround. Driven by increased module sales at home and abroad, as well as higher selling prices, revenue climbed 87.6 percent to 159.9 billion won from the previous year, while the company returned to the black with an operating profit of 29 billion won.
In its earnings call later in the day, HD KSOE said it is targeting $17.03 billion in orders this year after securing $6.39 billion in the first quarter, representing 37.5 percent of its annual goal. The group won orders for 60 vessels between January and March, led by high-value ships including liquified natural gas carriers, very large gas carriers, container vessels and tankers.
Despite geopolitical uncertainties, the company said the global shipbuilding market remains resilient, with robust freight rates and renewed LNG-related investment demand, particularly in the US.
While the conflict in the Middle East could weigh on energy demand and delay shipowners’ investment decisions, HD KSOE remains positive on the mid- to long-term outlook, citing key growth drivers, including tighter environmental regulations, the global energy transition and demand for replacing aging fleet.
Source: The Korea Herald