Hanwha Ocean Operating Loss Narrows in Q2 on Increased Demand

Hanwha Ocean Co., a major defense and shipbuilding company, said Friday its operating loss narrowed sharply in the second quarter on increased demand, reports Yonhap News Agency.

Operating loss

The company posted an operating loss of 9.6 billion won (US$6.93 million) for the April-June period, compared with a loss of 159 billion won a year earlier, it said in a regulatory filing.

Its sales jumped 39.3 percent on-year to 2.53 trillion won from 1.82 trillion won, while its net loss shrank to 27.4 billion won from 237.2 billion won.

Consequently, Hanwha Ocean reported 4.8 trillion won in sales for the first half, up 47.8 percent from a year ago.

Its half-yearly operating profit totaled 43.3 billion won and net profit amounted to 23.6 billion won, swinging from net losses a year earlier.

Hanwha Ocean attributed the increase in revenue to growth in shipbuilding volume and the repetitive production system of liquefied natural gas (LNG) carriers. In particular, it added that LNG carriers, a high-value ship type, accounted for more than half of sales.

The shipbuilder said its bottom line is expected to improve further in the second half due to the shipbuilding industry’s heavy-tailed deals, referring to contracts with small upfront payments and large delivery payments.

Orders for submarine depot maintenance and offshore plant will also increase sales in the next six months, it added.

For the first six months of the year, Hanwha Ocean has bagged $5.33 billion worth of orders to build 16 LNG carriers, seven huge crude carriers, two ammonia carriers, one LPG carrier, and one offshore plant.

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