Hanwha Ocean reported on the 27th that it recorded sales of 3.0234 trillion Korean won and an operating profit of 289.8 billion Korean won for this year’s third quarter (July-September). These figures represent increases of 11.8% and 1,032% compared to the same period last year, respectively, reports the Chosun Daily.
Hanwha Ocean reports profit surge
The strong performance in the third quarter was driven by increased orders due to the shipbuilding supercycle (period of extraordinary prosperity). The delivery period for liquefied natural gas (LNG) carriers, which Hanwha Ocean began constructing after securing orders from 2022, has arrived. Since most shipbuilding contracts are Heavy-tail contracts—a type of contract where a small down payment is received and a large payment is received upon delivery—profitability significantly increases during the delivery phase.
By business division, the commercial ship business division maintained an operating profit margin of over double digits by continuously building high-value-added vessels centered on LNG carriers. The specialized ship business division saw a 58% increase in sales compared to the previous quarter, driven by the continued production of core vessel types and the execution of naval Maintenance, Repair, and Overhaul (MRO) services.
A source from Hanwha Ocean stated, “We expect the proportion of LNG carrier sales to continue maintaining around 60% of total sales. A steady flow of operating profits is anticipated due to the reflection of new projects in sales.”
However, the uncertain global environment, including sanctions imposed by the Chinese government on a Hanwha Ocean subsidiary mid-this month amid the U.S.-China trade conflict, remains a variable moving forward. Hanwha Ocean plans to enhance profitability by focusing on the Philly Shipyard in the U.S., a key hub for Korea-U.S. shipbuilding cooperation. The source added, “The Philly Shipyard currently holds $3 billion in outstanding orders and aims for a turnaround next year. While some volatility exists due to Chinese sanctions, we are reviewing multi-faceted countermeasures to minimize the impact.”
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Source: The Chosun Daily
