HD Hyundai(267250)'s shipbuilding institutional sector intermediate holding company HD Korea Shipbuilding & Offshore Engineering(009540) beat market expectations in the second quarter this year on the back of expanding sales of high-price ships and improved productivity.
HD Korea Shipbuilding & Offshore Engineering said on the 29th that, on a consolidation basis for the second quarter, it posted sales of 8.927 trillion won and operating profit of 1.6451 trillion won. Those were up 20.2% and 72.5%, respectively, from a year earlier. Net profit jumped 256.6% to 1.5942 trillion won.
Sales and operating profit exceeded the securities consensus compiled by FnGuide—8.6329 trillion won and 1.4211 trillion won—by 3.4% and 15.8%, respectively. Compared with the previous quarter, sales rose 9.7% and operating profit increased 21.3%.
Productivity improved and more sales from high-price ships were recognized, and gains from selective order-taking boosted profitability.
Improvements were particularly notable among shipbuilding affiliates. HD Hyundai Heavy Industries reported sales of 6.3322 trillion won and operating profit of 1.0399 trillion won. It is the first time quarterly operating profit has topped 1 trillion won. Year over year, sales increased 52.7% and operating profit rose 120.6%. HD Hyundai Samho recorded sales of 2.3714 trillion won and operating profit of 534.1 billion won, up 11.9% and 43.7%, respectively.
HD Hyundai Marine Engine, buoyed by higher sales of eco-friendly engines, posted sales of 128.1 billion won and operating profit of 31.3 billion won. Those were up 29.1% and 79.2%, respectively, from a year earlier. HD Hyundai Energy Solutions reported sales of 165.0 billion won and operating profit of 36.1 billion won on stronger overseas sales and price hikes.
By business institutional sector, the shipbuilding institutional sector logged sales of 7.4510 trillion won and operating profit of 1.3986 trillion won, up 19.1% and 73.6%, respectively, from a year earlier. The gains reflected higher construction productivity and greater recognition of sales from ships ordered at higher prices in the past.
In the engine and machinery institutional sector, sales fell 1.8% to 760.2 billion won, but operating profit rose 33.6% to 268.6 billion won on strong sales of eco-friendly engines. In the offshore plant institutional sector, as key projects moved into full swing, sales reached 377.1 billion won with operating profit of 60.1 billion won.
An HD Korea Shipbuilding & Offshore Engineering official said, "With efforts to improve productivity and expanding sales of high-price ships, performance continues to improve," adding, "as orders continue across various ship types, including LNG carriers, container ships, and tankers, we plan to maintain a selective, profitability-focused order strategy."