HD Hyundai's Operating Profit Drops 40% YoY Amid Oil Refining Slump... Shipbuilding and Power Equipment Show Strong Growth

HD Korea Shipbuilding & Offshore, Returns to Profit After 3 Years
HD Hyundai Oilbank, Down 77.9% Year-on-Year

HD Hyundai announced on the 6th that it recorded consolidated sales of KRW 61.3313 trillion and operating profit of KRW 2.0316 trillion last year. Sales increased by 0.8% compared to the previous year, while operating profit decreased by 40%.

Regarding the performance, HD Hyundai explained, "Sales increased compared to the previous year thanks to the rise in construction volume due to increased orders for eco-friendly ships, expansion of market share in construction machinery centered on emerging and advanced markets, and strengthened targeting of key power equipment markets such as the US and the Middle East." It added, "Operating profit was affected by a decline in the refining sector's performance due to falling international oil prices and refining margins."

Looking at major business sectors, HD Hyundai Heavy Industries in the shipbuilding and offshore division achieved sales of KRW 21.2962 trillion, up 23.1% year-on-year, driven by increased orders and construction volume following its preemption of the global eco-friendly ship market. Operating profit turned positive for the first time in three years, reflecting the rise in ship prices due to a profitability-focused selective order strategy.

The world's first methanol-powered container ship 'Laura Musk,' built by Hyundai Mipo Dockyard [Photo by HD Hyundai Heavy Industries]

HD Hyundai Heavy Industries' subsidiaries recorded sales as follows: HD Hyundai Heavy Industries increased by 32.3% to KRW 11.9639 trillion, Hyundai Mipo Dockyard rose 8.7% to KRW 4.0391 trillion, and Hyundai Samho Heavy Industries grew 28.2% to KRW 5.9587 trillion. Hyundai Samho Heavy Industries led the performance improvement by recording an operating profit of KRW 30.17 billion, a 1604.5% increase compared to the previous year.

HD Hyundai Marine Solutions posted sales of KRW 1.4305 trillion, up 7.2% year-on-year, driven by strong orders in the ship parts service business and expansion of digital control businesses such as smart ship operation management and automation solutions. Operating profit continued its growth trend, increasing 41.9% to KRW 201.5 billion.

In the construction machinery sector, HD Hyundai Site Solutions recorded sales of KRW 8.7482 trillion, up 2.9% year-on-year, and operating profit of KRW 724.2 billion, up 56%. Despite a decline in demand in the European region since the second half of last year, the company maintained solid performance through securing potential demand via sales channel diversification, price increases, and rising demand for industrial and defense engines.

In the energy sector, HD Hyundai Oilbank recorded sales of KRW 28.1078 trillion and operating profit of KRW 616.7 billion, down 19.6% and 77.9% respectively from the previous year due to the decline in international oil prices and refining margins. HD Hyundai Oilbank plans to reduce performance volatility caused by external factors through expanding eco-friendly new businesses such as biofuels and optimizing processes.

HD Hyundai Electric achieved sales of KRW 2.7028 trillion, up 28.4% year-on-year, by strengthening sales capabilities and responding efficiently to production in line with increasing global power grid construction demand and transformer replacement demand. Operating profit reached KRW 315.2 billion, a 137% increase. The operating profit margin exceeded 10% for the first time on an annual basis, reaching 11.7%.

An HD Hyundai official said, "Despite the difficult environment of global high interest rates and ongoing wars, we were able to achieve favorable results through selective order strategies and pioneering new markets." He added, "As performance improvement in the shipbuilding sector is expected to accelerate this year and a turnaround in the refining sector is anticipated, we will continue stable performance through efforts to develop eco-friendly technologies and enhance profitability."

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