[Click eStock] "Hanwha Ocean to Post Loss in Q4... Operating Profit and Orders Expected to Recover This Year"

On the 29th, Korea Investment & Securities stated that Hanwha Ocean recorded an operating loss in the fourth quarter of last year, maintaining a target stock price of 29,000 KRW and a buy rating. However, they forecast that this year will be a turning point for the company to overcome poor performance and become profitable, expecting both operating profit and orders to recover.

Hanwha Ocean's consolidated sales for the fourth quarter were 2.2309 trillion KRW, with an operating profit of 44.1 billion KRW, resulting in a loss. While sales met consensus expectations, operating profit fell short of the market's expectation of a 9.9 billion KRW profit.

Researcher Kang Kyung-tae analyzed, "The reason for the operating loss despite robust sales is due to weak margins in merchant shipbuilding and the fact that a large proportion of the orders received at the early stage of rising ship prices are still in progress. It is necessary to consider that 90% of the merchant ships to be delivered in 2024 were ordered in 2020 and 2021, and the offshore segment, which is around the break-even point (BEP), showed poor operating profit."

Researcher Kang predicted that Hanwha Ocean will recover both operating profit and orders this year.

He said, "The operating loss, which was in the mid- to high-1 trillion KRW range in 2021 and 2022, significantly decreased to 200 billion KRW in 2023. The proportion of profitable ships ordered at high prices is increasing over time, so even without expecting one-off events, the company will return to profitability at a normal level."

Furthermore, he predicted that merchant ship orders will also overcome last year's slump and increase the average ship price with short-delivery profitable ships.

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