[Click eStock] Improved Earnings of Affiliates Including Oilbank... Hyundai Heavy Industries Holdings Holds Steady in 2Q

Hyundai Oilbank Turns Profitable Compared to Previous Quarter
Hyundai Electric and Hyundai Glovis Deliver 'Surprise Earnings'

[Asia Economy Reporter Minwoo Lee] Hyundai Heavy Industries Holdings posted results in the second quarter of this year that exceeded market expectations. Its affiliates performed relatively well compared to the industry, with Hyundai Oilbank recording profits despite the worst-ever refining market conditions.

On the 31st, for these reasons, Daishin Securities maintained a 'Buy' rating and a target price of 330,000 KRW for Hyundai Heavy Industries Holdings. The closing price on the previous day was 236,000 KRW.

In the second quarter of this year, Hyundai Heavy Industries Holdings reported consolidated sales of 4.0058 trillion KRW and operating profit of 104.3 billion KRW. These figures represent decreases of 41.3% and 48.4%, respectively, compared to the same period last year. Net income was 22.2 billion KRW, down 98% year-on-year. Nevertheless, the results surpassed market consensus. According to financial information provider FnGuide, the consensus for Hyundai Heavy Industries Holdings was sales of 4.17 trillion KRW, operating profit of 80 billion KRW, and a net loss of 8 billion KRW. Compared to the previous quarter, sales fell by 29.9%, but the operating loss of 487 billion KRW turned into a profit. This is why the company is seen as having performed well despite low oil prices and other challenging market conditions.

The strong performance of affiliates was a key factor. Hyundai Oilbank posted operating profits even in the worst refining market conditions, with sales of 2.5517 trillion KRW and operating profit of 13.2 billion KRW. Although sales dropped about 42.2% from the previous quarter, it successfully turned an operating loss of 563.2 billion KRW into a profit. Hyundai Electric recorded a 'surprise performance,' with sales of 535.5 billion KRW and operating profit of 18.3 billion KRW, marking a 32.2% increase in sales year-on-year and a turnaround from an operating loss of 80.7 billion KRW to profit. Hyundai Global Service also saw sales of 230.5 billion KRW and operating profit of 43.4 billion KRW, increases of 37.9% and 83.1%, respectively, compared to the same period last year.

Yang Ji-hwan, a researcher at Daishin Securities, forecasted, "In the second half of the year, Hyundai Oilbank's performance is expected to improve due to securing economic feasibility from the widening price gap between Middle Eastern crude oil and heavy and ultra-heavy oil, as well as an increased proportion of heavy and ultra-heavy oil input." He added, "There is no change in the medium- to long-term dividend policy, so the dividend trend is expected to be maintained."

This content was produced with the assistance of AI translation services.