HD Korea Shipbuilding & Offshore Engineering, the intermediate holding company for HD Hyundai’s shipbuilding businesses, said Wednesday its third-quarter operating profit rose 37.3 percent from a year earlier, driven by higher ship prices and strong earnings from its engine and offshore businesses.
For the July-September period, HD KSOE posted an operating profit of 1.45 trillion won ($1.08 billion), while revenue rose 9.3 percent on-year to 8.29 trillion won, the company said in a regulatory filing.
Earnings climbed despite fewer working days due to seasonal factors and unfavorable foreign exchange movement, as higher-priced vessels, including liquefied natural gas carriers, lifted revenue and profitability improved across major business segments.
Breaking it down, HD Hyundai Heavy Industries, the group’s largest shipbuilding affiliate, posted revenue of 5.75 trillion won, up 30.2 percent from a year earlier, while operating profit surged 61.3 percent to 899.2 billion won.
The company said higher shipbuilding contract prices and continued earnings growth in its engine machinery and offshore plant businesses lifted the profit.
HD Hyundai Samho, another major shipbuilding subsidiary, reported revenue of 2.37 trillion won and operating profit of 479 billion won, up 20.5 percent and 56.3 percent, respectively, from a year earlier. The gains were largely driven by expanded sales of LNG carriers, according to the company.
In the marine engine business, HD Hyundai Marine Engine recorded revenue of 211.4 billion won, up 93.8 percent on-year, while operating profit nearly tripled to 60.3 billion won, an increase of 197 percent. The growth was fueled by higher engine deliveries and increased sales of dual-fuel engines.
HD Hyundai Energy Solutions, the group’s solar power affiliate, posted revenue of 150.8 billion won and operating profit of 20.4 billion won, up 24.6 percent and 38.8 percent respectively, helped by profitability in its solar module business.
Looking ahead, HD KSOE said it would continue to focus on improving productivity and focus on securing orders of high-margin vessels.
“We maintained solid profitability on the back of strong performance across our major business segments and continued productivity improvements,” a company official said. “We will continue to improve productivity and pursue selective orders centered on high-value vessels to maintain our strong earnings momentum.”
sahn@heraldcorp.com
