HD Hyundai, All Business Divisions Profitable... Operating Profit Up 86% Due to Shipbuilding and Power Equipment Boom (Comprehensive)

'Weak Performance' HD Hyundai Oilbank Signals Dividend Adjustment

HD Hyundai posted strong earnings driven by a boom in shipbuilding and power equipment.

On the 25th, HD Hyundai announced that its consolidated sales for the second quarter of this year reached KRW 17.5549 trillion, with an operating profit of KRW 879.9 billion. Compared to the same period last year, sales increased by 12.4%, and operating profit rose by 86.2%.

Regarding the second quarter performance, HD Hyundai stated, "Despite weak results in the refining sector, all business divisions recorded profits," adding, "We continued a favorable trend through expanded profitability in key businesses such as shipbuilding and power equipment."

Operating Profit of HD Hyundai Affiliates in Q2 This Year
[Image Source=HD Hyundai]

Looking at major business segments, HD Korea Shipbuilding & Offshore, the intermediate holding company for shipbuilding and offshore, achieved five consecutive quarters of profit. Sales of high value-added vessels, including eco-friendly dual-fuel ships, were fully reflected in the results, recording KRW 6.6155 trillion, a 21.3% increase from the previous year. Operating profit soared 428.7% year-on-year to KRW 376.4 billion. Profitability improved through selective order intake and cost reduction efforts via production stabilization, boosting operating profit.

HD Hyundai Heavy Industries posted sales of KRW 3.884 trillion, up 26.7% from the previous year; HD Hyundai Samho recorded KRW 1.8106 trillion, up 16.9%; and HD Hyundai Mipo achieved KRW 1.1291 trillion, up 9.3%. Operating profits for HD Hyundai Heavy Industries and HD Hyundai Samho increased by 185.5% and 182.2% year-on-year, reaching KRW 195.6 billion and KRW 175.5 billion, respectively. HD Hyundai Mipo recorded an operating profit of KRW 17.4 billion, successfully returning to profitability after seven quarters.

Perspective view of HD Hyundai Heavy Industries' ultra-large ammonia carrier
[Photo by HD Hyundai Heavy Industries]

HD Hyundai Electric posted sales of KRW 916.9 billion, a 42.7% increase year-on-year, driven by expanding global power infrastructure demand. Operating profit surged 257.1% to KRW 210 billion, achieving an operating margin of 22.9%. The sales proportion increased mainly in high-profit regions such as North America and the Middle East.

HD Hyundai Oilbank recorded sales of KRW 7.844 trillion and an operating profit of KRW 73.4 billion. Although operating profit more than doubled by 103.3% compared to the previous year, it decreased by 76% from the previous quarter. HD Hyundai explained this was due to a decline in refining margins and worsening market conditions for light oil products such as gasoline and diesel. The operating margin stood at 0.9%. Market conditions are expected to improve in the second half of the year due to increased industrial demand and higher heating oil usage in winter. The company plans to enhance profitability by expanding the supply of eco-friendly products such as biofuels.

HD Hyundai Electric Ulsan Plant View
[Photo by HD Hyundai Electric]

HD Hyundai also hinted at the possibility of dividend adjustments due to the weak performance of HD Hyundai Oilbank, which accounts for 44% of the group’s sales. During the conference call following the earnings announcement, HD Hyundai stated, "Depending on performance, dividends from HD Hyundai Oilbank may decrease, while dividends from companies with strong results may increase. Since the group has disclosed that about 30% of net profit will be paid as dividends, dividends from other profitable affiliates are also possible."

In the construction machinery sector, HD Hyundai Site Solutions recorded sales of KRW 2.0131 trillion and operating profit of KRW 169.4 billion, down 16.4% and 37.5% year-on-year, respectively, as the global construction machinery market continued to tighten amid a high-interest-rate environment in the second quarter.

HD Hyundai Marine Solutions posted sales of KRW 437.9 billion, a 20.2% increase from the previous year. The strong performance was driven by the ship maintenance and repair (AM·After Market) business amid stricter eco-friendly regulations and the expansion of digital solutions business. Operating profit rose 29.6% to KRW 71 billion. HD Hyundai Energy Solutions recorded sales of KRW 112.8 billion and operating profit of KRW 7.9 billion.

HD Hyundai Robotics posted sales of KRW 69.7 billion and operating profit of KRW 300 million. During the conference call, HD Hyundai said, "The increase in robot sales was influenced by a rise in orders for automotive industry robots," adding, "We have sufficient orders secured for the second half, so we expect to achieve results similar to or better than the first half."

An HD Hyundai official said, "Amid rapidly changing international circumstances, we were able to maintain growth through tailored strategies by diversifying portfolios across business sectors," and added, "We will continue to maintain stable performance through profitability-focused sales strategies in the second half."

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