HD Hyundai Marine Engine(071970) said on the 28th that it posted 128.1 billion won in revenue and 31.2 billion won in operating profit on a consolidation basis in the second quarter of this year.
In the second quarter of this year, HD Hyundai Marine Engine's revenue and operating profit both increased from a year earlier. Revenue rose 29% from the same period last year, and operating profit rose 79.3%. Net profit was 31.8 billion won, up 92% from the same period last year.
Compared with a year earlier, HD Hyundai Marine Engine's results improved significantly, but they fell short of market expectations. Earlier, the securities industry had estimated that HD Hyundai Marine Engine would post 146.4 billion won in revenue and 35.4 billion won in operating profit for the quarter.
Results also worsened from the previous quarter. In the second quarter of this year, HD Hyundai Marine Engine's revenue and operating profit decreased 4% and 4.3%, respectively, from the previous quarter. On the 1st quarter, HD Hyundai Marine Engine posted 133.5 billion won in revenue and 32.6 billion won in operating profit.
This was due to some delivery schedules for engines being adjusted amid expanded orders in the engine business from Chinese shipbuilders. In the second quarter of this year, HD Hyundai Marine Engine's engine business revenue was 94.1 billion won, up 19% from the same period last year. A HD Hyundai Marine Engine official said, "Orders for marine engines from Chinese shipyards have been strong, which had an impact," adding, "Increased engine deliveries and higher selling prices led to improved results."
Revenue in the parts business was 34 billion won, up 68% from the same period last year. Increased orders from affiliates for turbochargers, parts that improve engine efficiency, had an impact.
However, lower revenue in the engine business due to delivery schedule adjustments affected the results. HD Hyundai Marine Engine also said that additional depreciation resulting from the reversal of impairment of property, plant and equipment in the fourth quarter of last year affected its second-quarter results this year.
An HD Hyundai Marine Engine official said, "For engines, revenue is recognized based on delivery, not percentage of completion," adding, "As engine delivery schedules were adjusted, revenue and operating profit edged down from the previous quarter."