HD Hyundai's mid-holding company for the shipbuilding institutional sector, HD Korea Shipbuilding & Offshore Engineering, posted first-quarter results that beat market expectations thanks to expanded revenue from high-margin, eco-friendly ships and improved productivity. Despite fewer working days due to seasonal factors, profitability improved in the shipbuilding, engine and machinery, and offshore plant institutional sectors, with operating profit exceeding the securities consensus (average forecast) by 14.8%.
HD Korea Shipbuilding & Offshore Engineering said on the 7th that on a consolidation basis, it posted first-quarter revenue of 8.1409 trillion won and operating profit of 1.356 trillion won. Compared with a year earlier, revenue rose 20.2% and operating profit increased 57.8%.
The improved results stemmed from a larger share of revenue from high-margin, eco-friendly ships, higher productivity, and better revenue in the offshore institutional sector. Even with fewer working days, higher build volumes of high-priced ships and ongoing process-efficiency gains lifted revenue and profit across all business institutional sectors.
By affiliate, integrated HD Hyundai Heavy Industries, launched through a merger with HD Hyundai Mipo on Dec. 1 last year, led the growth. HD Hyundai Heavy Industries posted first-quarter revenue of 5.9163 trillion won and operating profit of 905.4 billion won this year. Before the merger in the first quarter of last year, HD Hyundai Heavy Industries recorded revenue of 3.8225 trillion won and operating profit of 433.7 billion won.
HD Hyundai Samho also maintained a solid performance trend. In the first quarter, HD Hyundai Samho's revenue was 2.1245 trillion won and operating profit was 395.2 billion won, each up 8% from a year earlier.
HD Hyundai Marine Engine, a ship engine affiliate, saw revenue and profit rise together on higher engine selling prices, increased delivery volumes, and expanded parts sales. In the first quarter, HD Hyundai Marine Engine's revenue was 133.5 billion won and operating profit was 32.6 billion won, up 60.8% and 216.5%, respectively, from a year earlier.
HD Hyundai Energy Solutions, a solar affiliate, swung to a profit on increased domestic and overseas module sales and higher selling prices. Revenue rose 87.6% from a year earlier to 159.9 billion won, and operating profit came to 29 billion won.
By business institutional sector, the shipbuilding institutional sector logged revenue of 6.6963 trillion won and operating profit of 1.1107 trillion won as productivity gains and a better product mix continued. Compared with a year earlier, revenue rose 14.6% and operating profit increased 42.1%.
The engine and machinery institutional sector improved on stronger demand for dual-fuel engines due to tighter global eco-friendly regulations and higher selling prices. Revenue was 717 billion won and operating profit was 218.1 billion won, up 7.5% and 41.3%, respectively, from a year earlier.
The offshore plant institutional sector reflected expanded revenue recognition as project progress advanced and the effects of expense reductions. Revenue was 457.8 billion won and operating profit was 86.6 billion won, up 183.8% and 1,212.1%, respectively, from a year earlier.
A HD Korea Shipbuilding & Offshore Engineering official said, "Newbuild orders continue to center on large tankers, while orders for gas carriers and container ships are also ongoing," adding, "In the second half, as bidding for large LNG projects in the United States gains momentum and demand for LNG carriers is expected to expand further, we will continue selective orders focused on high value-added ships."