HD Hyundai Reports Q3 Operating Profit of 667.7 Billion KRW... Shipbuilding Posts Consecutive Profit for 2 Quarters

Sales and Operating Profit Down 20.6% and 37.7%, Respectively

HD Hyundai announced on the 26th that it recorded consolidated sales of KRW 13.7232 trillion and operating profit of KRW 667.7 billion for the third quarter of this year. These figures represent decreases of 20.6% and 37.7%, respectively, compared to the previous year.

The poor performance was largely due to the operating profits in the shipbuilding and refining sectors falling to less than half of those in the same period last year. The shipbuilding division, HD Hyundai Heavy Industries, saw its operating profit decrease by 63.5% compared to a year ago, while the refining division, HD Hyundai Oilbank, experienced a 54.6% decline. Regarding the shipbuilding division's performance, HD Hyundai stated, "There were no factors improving operating profit due to the absence of revenue recognition from the Hyundai Samho Heavy Industries contract renewal," adding, "However, sales increased compared to the previous year due to an increase in construction volume and higher construction unit prices."

Nevertheless, HD Hyundai Heavy Industries maintained a positive operating profit trend for the second consecutive quarter, recording an operating profit of KRW 69 billion thanks to improved performance from affiliates such as Hyundai Samho Heavy Industries. Sales reached KRW 5.0112 trillion. Although this was a 17.5% increase from the previous year, sales decreased by 3.1% compared to the previous quarter due to a reduction in operating days caused by seasonal factors. Going forward, as the proportion of high value-added ship sales gradually increases, the positive operating profit trend is expected to continue into the fourth quarter.

Inside the HD Hyundai Global R&D Center (GRC) in Seongnam-si, Gyeonggi Province [Photo by HD Hyundai]

The refining division, HD Hyundai Oilbank, posted sales of KRW 5.8235 trillion and an operating profit of KRW 319.1 billion. Sales declined due to scheduled maintenance of crude oil refining facilities. Although operating profit decreased compared to the previous year, it increased by 783.9% compared to the previous quarter. This was influenced by rising international oil prices due to ongoing crude oil production cuts by major oil-producing countries and improved complex refining margins driven by increased demand, including seasonal factors.

The construction machinery division, HD Hyundai Site Solutions, recorded sales of KRW 2.0629 trillion and an operating profit of KRW 161.1 billion. Despite a decrease in demand due to seasonal factors, solid performance was maintained thanks to infrastructure investments in advanced markets including North America and Europe, as well as reshoring in the manufacturing sector. Operating profit increased by 23% year-on-year, supported by strong performance in the engine and industrial vehicle sectors, price increases, and efforts to improve profitability through cost reductions.

HD Hyundai Electric achieved its highest operating profit and operating profit margin (12.3%) on a single-quarter basis. Benefiting from expanded global power infrastructure investments, it recorded sales of KRW 694.4 billion and operating profit of KRW 85.4 billion, marking increases of 29.8% and 125.9%, respectively, compared to the previous year. Profitability significantly improved as orders secured after the power equipment market boom were reflected in the results.

HD Hyundai Global Service continued solid performance with sales of KRW 358.6 billion and operating profit of KRW 50.2 billion, driven by increased sales in the highly profitable parts service business. These figures represent increases of 23.8% and 36.8%, respectively, compared to the previous year.

HD Hyundai Energy Solutions recorded sales of KRW 140.9 billion and operating profit of KRW 4.8 billion, while HD Hyundai Robotics posted sales of KRW 45.5 billion and operating profit of KRW 100 million. In the case of HD Hyundai Robotics, operating profit decreased by 98.7% year-on-year due to rising material costs and temporary expense payments. HD Hyundai explained that sales recovery is expected in the second half of the year due to increased orders from Hyundai Motor Company and Kia’s domestic and overseas projects, as well as various other parts suppliers.

An HD Hyundai representative stated, “The shipbuilding division continues its positive operating profit trend, and the strong performance of key businesses such as refining, construction machinery, and power equipment is expected to sustain stable results in the fourth quarter. We will further strengthen profitability through strategic sales activities that respond to changes in the external environment.”

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