HD Hyundai Marine Solution recently signed a parts supply and maintenance contract for dual-fuel propulsion ships with a Singaporean shipping company. As environmental regulations increase, more shipping companies are adopting dual-fuel propulsion engines such as liquefied natural gas (LNG), allowing HD Hyundai Marine Solution to secure ongoing orders.
According to the shipping industry on the 31st, HD Hyundai Marine Solution signed a supply and lifecycle maintenance contract for micro pilot injectors (MPI) with EPS (Eastern Pacific Shipping Pte) on the 28th.
While the specific scale of the contract has not been disclosed, EPS noted, "This contract is the largest MPI deployment in the industry." The MPI is a key component of ship engines that injects pilot fuel (a small amount of fuel used to assist in igniting the main fuel) to ignite gas on dual-fuel propulsion vessels.
HD Hyundai Marine Solution has secured multiple contracts related to LNG vessels. Last year, it signed a 49.4 billion won contract to supply shaft power generation systems for an LNG carrier with a shipping company in the Middle East and also entered into a long-term maintenance service supply contract for ships worth 82.9 billion won.
The introduction of dual-fuel propulsion vessels is on the rise. According to the Korea Shipowners' Association, as of the end of last year, eco-friendly ships equipped with dual-fuel propulsion engines accounted for 7.4% of the total gross tonnage of the world's merchant fleet. This ratio was 3.2% in 2018. During the same period, the proportion of dual-fuel propulsion vessels in the global order backlog increased from 16% to 52%.
HD Hyundai Marine Solution is focusing on business related to eco-friendly dual-fuel propulsion engines, giving it a bright performance outlook. Choi Kwang-sik, a researcher at DAOL Investment & Securities, said, "The spread of dual-fuel propulsion engines and carbon emission regulations will continue to drive growth," adding that "profit margins are also improving."
DAOL Investment & Securities projected that this year, HD Marine Solution's revenue will increase by 17% year-on-year to 2.043 trillion won and operating profit will rise by 33% to 360 billion won. By 2027, it is expected that revenue will reach 2.797 trillion won and operating profit will be 579.2 billion won.