HD Hyundai Achieves 1 Trillion Won Operating Profit for Second Consecutive Quarter... Shipbuilding Division Turns Profitable

Sales of 17.2872 trillion KRW, Operating Profit of 1.0716 trillion KRW

Source=Hyundai Heavy Industries

[Asia Economy Reporter Jeong Dong-hoon] HD Hyundai, the holding company of Hyundai Heavy Industries Group, recorded operating profits exceeding 1 trillion KRW for the second consecutive quarter.

On the 27th, HD Hyundai announced through a public disclosure that its consolidated sales for the third quarter reached 17.2872 trillion KRW, with operating profits of 1.0716 trillion KRW. Compared to the same period last year, sales increased by 137.5%, and operating profits rose by 255.2%.

◆All subsidiaries, including the shipbuilding division, achieved profitability=Despite the global economic uncertainties such as worldwide inflation, interest rate hikes in various countries, and the prolonged Russia-Ukraine war, HD Hyundai recorded operating profits exceeding 1 trillion KRW for the second consecutive quarter. Notably, all subsidiaries, including the shipbuilding division which turned profitable, Hyundai Oilbank, Hyundai Genuine, Hyundai Electric, Hyundai Global Service, and Hyundai Robotics, achieved profitability.

By major business sectors, the shipbuilding division showed remarkable performance improvement, successfully turning profitable thanks to an increased share of LNG (liquefied natural gas) carriers, exchange rate appreciation, and continuous cost reduction efforts. The construction machinery division maintained solid performance based on sales expansion in advanced and emerging markets. The energy business division continued stable results supported by the high upgrading rate in the refining sector and steady performance in the petrochemical sector.

Korea Shipbuilding & Offshore Engineering reported third-quarter sales of 4.2644 trillion KRW and operating profits of 188.8 billion KRW. Despite a reduction in operating days due to summer vacations and a challenging external business environment amid global inflation, the company succeeded in turning profitable compared to the previous quarter through improvements in its ship portfolio, steady cost reduction, and process efficiency efforts. Compared to the same period last year, sales increased by 19.9%, and operating profits rose by 33.2%.

Hyundai Genuine, the construction machinery division, achieved sales of 2.1016 trillion KRW and operating profits of 131 billion KRW despite a contraction in the Chinese market, driven by significant sales growth in advanced markets such as Europe and North America, emerging markets like Southeast Asia, and increased engine business sales.

◆Refining business strengthened with eco-friendly chemical materials, operating profits in the 700 billion KRW range=Hyundai Oilbank recorded sales of 10.2831 trillion KRW and operating profits of 702.2 billion KRW. Despite refining margin declines due to demand slowdown and inventory valuation losses caused by falling oil prices, operating profits increased by 305.6% compared to the same period last year. Hyundai Oilbank plans to strengthen its eco-friendly chemical materials business centered on the recently completed HPC plant and expand its eco-friendly portfolio by investing in the construction of a next-generation biodiesel plant scheduled for completion in the third quarter of next year.

Hyundai Electric posted sales of 535.1 billion KRW and operating profits of 37.8 billion KRW. Its performance improved due to selective order strategies, improvements in the shipbuilding market, and exchange rate appreciation, resulting in sales and operating profits increasing by 35.8% and 410.8%, respectively, compared to the same period last year.

Hyundai Global Service also recorded sales of 289.6 billion KRW and operating profits of 36.7 billion KRW, supported by strong orders for eco-friendly ship retrofits (upgrading old manufacturing facilities) and ship parts services. With Europe’s LNG supply diversification policies expected to increase new orders for FSRU (floating storage and regasification units) retrofits, sales and operating profits are anticipated to improve further. Hyundai Robotics also turned profitable with operating profits of 7.6 billion KRW compared to the same period last year, continuing its performance improvement trend.

A Hyundai Heavy Industries Group official stated, "We maintained a stable profitability trend across all business areas including shipbuilding, refining, and construction machinery, achieving operating profits exceeding 1 trillion KRW for the second consecutive quarter. Amid the emerging complex economic crisis, we will focus all efforts on securing market leadership through eco-friendly technology development and pursuing profitability-focused business strategies to sustain solid performance."

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