HD Hyundai Marine Solutions Reports Operating Profit of 271.7 Billion KRW Last Year, Up 35% Year-on-Year

Rising Demand for Ship Maintenance and Repair
Aiming to Surpass 2 Trillion KRW in Sales for the First Time This Year

HD Hyundai's comprehensive solution company in the marine industry, HD Hyundai Marine Solution, announced on the 4th that its consolidated operating profit last year increased by 35% compared to the previous year, reaching 271.7 billion KRW. Sales rose by 22% to 1.7455 trillion KRW.

HD Hyundai Marine & Solutions' ship. Not related to the article content.

The growth was driven by a 33% increase in sales of the core business, the AM (After Market) business related to ship parts and services, compared to 2023. The company explained that the increase in deliveries of new ships and the expansion of eco-friendly dual-fuel engine adoption recently led to higher demand for maintenance and repair services, resulting in sales growth and improved profitability.

An HD Hyundai Marine Solution official commented on the correlation between the AM business and shipping market conditions, stating, "When market conditions are poor, shipowners tend to carry out deferred maintenance, so opportunities for the AM business can expand. Although it is not 100% linked to market conditions, long-term fixed contracts have been actively carried out since 2021, and from this year, a large number of renewal requests for existing contracts have been received, which we view positively."

The digital solution business, identified as a future growth engine, also contributed to performance improvement with a 13.5% increase in sales compared to the previous year. An HD Hyundai Marine Solution representative said, "The digital solution business segment generally has a very high margin. We spent an additional 1 to 2 billion KRW on research expenses compared to the first to third quarters." They added, "Overall for the year, there is no significant change, but as the company operates, additional research expenses are incurred in the fourth quarter, and as more general-purpose products increase rather than high value-added products, the margin rate slightly declined compared to the previous quarter."

Sales from the eco-friendly retrofit business remained at a similar level to last year. Second-generation retrofit projects, such as storage facility (FSU) modifications, are also progressing smoothly. However, an HD Hyundai Marine Solution official explained, "Although the margin was low in the early stages of the first generation, as operational efficiencies accumulated, a considerable level of margin was achieved. Since we are conducting the second generation for the first time, it will be difficult to realize margins as high as the first generation immediately."

Regarding the re-liquefaction retrofit work in the eco-friendly sector, the company explained, "We have secured orders for a total of 10 vessels; one has been successfully completed, and the remaining nine are scheduled for construction this year. The remaining sales amount is about 91 million USD." They added, "FSRU is a large-scale retrofit exceeding 100 million USD, and requests are mainly coming from developing countries such as Bangladesh and Indonesia. More time will be needed for decision-making and consultation processes."

With the recent increase in ship orders, demand for ship maintenance and repair is also expected to rise significantly. Additionally, due to strengthened environmental regulations such as greenhouse gas emission reductions, demand for eco-friendly retrofits is steadily increasing.

HD Hyundai Marine Solution has set a sales target of 2.0556 trillion KRW for this year, aiming to surpass 2 trillion KRW in sales for the first time since its launch. Regarding this, the company stated, "Of the eco-friendly solution backlog of 130 million USD, 70% will be reflected in this year's sales," adding, "As the remaining amounts are secured, we will be able to achieve this year's sales target."

An HD Hyundai Marine Solution official said, "With continued orders for eco-friendly ships in the global newbuilding market, the ship maintenance and repair market is maintaining stable growth," and added, "We plan to secure a super-gap competitive edge through expanding overseas networks and advancing digital solutions."

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