Profit exceeding 200 million US dollars! HD South Korea Shipbuilding and Marine Industry Ends Loss After 3 Years
Thanks to the arrival of the super cycle in the shipbuilding industry, HD Korea Shipbuilding Ocean has finally made another profit after a three-year hiatus.
On January 23rd, HD South Korea Shipbuilding Ocean released its 2023 performance forecast, with the company achieving a total annual revenue of KRW 21.2962 trillion (approximately USD 15.92 billion), a year-on-year increase of 23.1%; Realized an operating profit of KRW 282.3 billion (approximately USD 210 million), successfully turning losses into profits.
In 2021 and 2022, HD South Korea Shipbuilding Marine experienced operating losses of KRW 13848 trillion (approximately USD 1.03 billion) and KRW 355.6 billion (approximately USD 270 million), respectively. This is the aftermath of the long-term stagnation of the global shipbuilding market and low ship prices. Among them, in 2021, the company suffered a huge loss of over 1 billion US dollars due to the rise in ship steel prices and huge reserves of severance pay, which is twice the market's predicted loss amount; In 2022, the company continued to incur overall losses, mainly due to the delivery of new ships, including low-priced ships previously undertaken, and the increase in labor costs under inflationary pressure. However, the extent of the losses has significantly decreased.
However, after entering 2022, HD Korea Shipbuilding Ocean began to enter the construction and delivery phase of the high priced ship orders it undertook in 2021, laying a good foundation for turning losses into profits. Since the third quarter of 2022, the company has achieved profitability for two consecutive quarters. Among them, the operating profit in the third quarter was 80.9 billion Korean won (approximately 57 million US dollars), and it has been a year since the third quarter of 2021 when it fell into losses and successfully turned losses into profits; In the fourth quarter, the operating profit was 117.1 billion Korean won (approximately 93 million US dollars).
After entering 2023, the company's revenue has further improved. In the first quarter, HD Korea Shipbuilding Marine achieved a revenue of 4842.4 billion Korean won (approximately 3.515 billion US dollars), a year-on-year increase of 23.9%; Achieved an operating profit of 58.5 billion Korean won (approximately 44 million US dollars), achieving profitability for three consecutive quarters. In the first half of 2023, HD Korea Shipbuilding Marine achieved a revenue of KRW 5.4536 trillion (approximately USD 4.27 billion), a year-on-year increase of 30.2%; Realized an operating profit of 71.2 billion Korean won (approximately 55.7 million US dollars). In the third quarter of 2023, HD Korea Shipbuilding Marine achieved operating revenue of KRW 5.0112 trillion (approximately USD 3.69 billion) and operating profit of KRW 69 billion (approximately USD 50.83 million), maintaining a profitable state.
In addition, Hyundai Sanhu Heavy Industries, a shipbuilding subsidiary of HD Korea Shipbuilding Marine, released its performance report on January 17th. The company achieved a revenue of KRW 59587 trillion (approximately USD 4.45 billion) in 2023, a year-on-year increase of 28.2%; Realized operating profit of 301.7 billion Korean won (approximately 225 million US dollars), a year-on-year increase of 1604.5%; Realized a net profit of 211.2 billion Korean won (approximately 158 million US dollars), a year-on-year sharp increase of 7182.8%.
HD South Korea Shipbuilding Marine emphasized that in 2023, the company undertook a total of 158 (seat) marine equipment orders, with a total contract amount of 22.33 billion US dollars, achieving 141.9% of the annual order target of 15.74 billion US dollars. In addition to the large number of new ship orders undertaken in the previous two years, HD Korea Shipbuilding Ocean has already met the workload of over 3 years with a handheld order value of up to 65 billion US dollars as of the end of November 2023. In the coming years, as the proportion of high value-added ships such as LNG ships increases, the company's operating revenue and profits are expected to continue to grow.
Especially since the beginning of this year, the trend of HD South Korea Shipbuilding Marine's order taking is still rapid. As of now, the company has undertaken 32 new ship orders this year, with a total contract amount of 3.006 billion US dollars, reaching approximately 22.3% of this year's target of 13.5 billion US dollars, including 2 large LNG ships, 15 VLGC/VLAC ships, and 15 finished oil tankers. In this regard, the Korean industry believes that HD Korea Shipbuilding Marine will also successfully achieve its annual order target this year.
