Hyundai Heavy Holdings Reports Operating Profit of 718.9 Billion KRW in First Half... Highest Half-Year Record

One of Hyundai Oilbank's advanced facilities, the SDA process. Photo by Hyundai Oilbank

[Asia Economy Reporter Choi Dae-yeol] Hyundai Heavy Industries Holdings announced on the 23rd that its operating profit for the second quarter reached 184.6 billion KRW, a 77% increase compared to the same period last year. Sales rose by 58% during the same period to 6.3303 trillion KRW.

Although operating profit decreased by about 66% compared to the first quarter, the company recorded a profit for the second consecutive quarter, marking the highest level on a half-year basis since the company's establishment in 2017. The previous record was 669.3 billion KRW in the first half of 2018. Sales for the first half of this year increased by about 28% year-on-year to 12.4058 trillion KRW.

The increase in sales was driven by rising oil prices boosting the refining sector, along with strong performance in the non-refining sectors. The decline in second-quarter operating profit compared to the previous quarter was attributed to a reduced inventory effect in the refining sector and equity-method valuation losses in the shipbuilding sector.

Hyundai Oilbank recorded an operating profit of 265.7 billion KRW in the second quarter. Although the inventory effect, an accounting gain or loss caused by price fluctuations between the time of crude oil purchase and product production/sales, decreased, the increase in demand for petroleum products improved product spreads and profitability. Hyundai Oilbank's operating profit of 678.5 billion KRW for the first half is also the highest ever on a half-year basis.

Hyundai Construction Equipment posted an operating profit of 70.7 billion KRW in the second quarter, driven by increased sales in emerging markets domestically and abroad, as well as revived demand in North America and Europe. The company's operating profit for the first half reached 150.4 billion KRW, surpassing last year's full-year operating profit of 91.6 billion KRW. Hyundai Electric recorded an operating profit of 26.5 billion KRW in the second quarter, marking six consecutive quarters of profitability. Hyundai Global Service achieved an operating profit of 29.4 billion KRW in the second quarter, supported by increased orders for eco-friendly ship retrofitting and ship parts business.

A company official stated, "With the full-scale operation of the HPC (Olefin Petrochemical Plant) and improved profitability in the shipbuilding sector, we expect a significant increase in performance in the second half of the year," adding, "We will continue stable performance through a market-leading position in eco-friendly sectors and a profitability-focused sales strategy."

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