South Korean shipbuilder Hanwha Ocean said Tuesday that its third-quarter operating profit jumped 67.6 percent from a year earlier, driven by strong earnings and a recovery in its offshore energy business.
Operating profit from July to September reached 485.7 billion won ($366.8 million), up from 289.8 billion won a year earlier, the company said in a regulatory filing. Revenue rose 12.9 percent on-year to 3.41 trillion won, while net profit plunged 46.1 percent to 145.1 billion won.
The results were buoyed by the construction of high-priced vessels, including liquefied natural gas carriers, and steady progress in submarine and surface ship projects. Revenue recognition from ships secured at higher contract prices helped the company maintain solid profitability despite fewer working days and unfavorable foreign exchange movements.
Compared with the previous quarter, however, operating profit declined 34 percent from 736.1 billion won, while revenue fell 37 percent from 5.44 trillion won.
Despite the sequential declines, the company’s operating profit margin improved to 14.2 percent from 13.5 percent in the second quarter and 9.6 percent a year earlier.
Commercial shipbuilding remained Hanwha Ocean’s main profit engine, with operating profit up 54 percent on-year to 471.8 billion won. Revenue from the division increased 10 percent to 2.72 trillion won.
Hanwha credited the division’s strong profitability to a growing share of ships won at higher contract prices.
The naval shipbuilding division, however, swung to an operating loss of 70.6 billion won from a profit of 28.8 billion won a year earlier, weighing on overall earnings. The company cited fixed-cost burdens and increases in estimated costs for certain projects as the main reasons for the deterioration. Revenue from the division declined 3 percent on-year to 363 billion won.
The energy plant division, meanwhile, returned to profitability, posting operating profit of 91.4 billion won, compared with a loss of 52.6 billion won a year earlier.
Revenue from the division nearly doubled to 527.5 billion won, fueled by additional revenue recognized from change orders on floating production, storage and offloading projects, as well as income from drillship leasing.
Looking ahead, Hanwha Ocean said it expects its commercial shipbuilding unit to stay profitable, as higher-margin projects won since 2024 make up a larger share of revenue and cost-cutting efforts continue.
In its naval business, Hanwha Ocean aims to lift profitability through further contract adjustments and cost controls, while seeking to accelerate work on key domestic submarine and frigate projects.
The shipbuilder also expressed optimism about demand for LNG carriers and crude oil tankers, citing expanding US LNG exports, changing global energy supply chains and replacement demand for aging vessels.
By Ahn Sung-mi (sahn@heraldcorp.com)
