HD Korea Shipbuilding & Offshore Engineering (HD KSOE), the strategic intermediate holding company for HD Hyundai’s comprehensive shipbuilding operations, announced a record first-quarter profit, primarily driven by exceptional demand for high-margin, eco-friendly vessels.
During the January to March period, HD KSOE reported a significant financial surge, with revenue climbing 20.2 percent year-on-year to 8.14 trillion won ($5.61 billion), and operating profit soaring 57.8 percent to 1.36 trillion won ($938.9 million). This impressive performance also surpassed market expectations, as compiled by FnGuide, by a substantial 14.8 percent.
This stellar financial outcome was largely attributed to the robust market for high-margin eco-friendly vessels, coupled with enhanced operational productivity and a noticeable improvement in profitability across its offshore business segment. Furthermore, the engine and machinery division experienced strong profit growth, propelled by increasing global demand for advanced dual-fuel engines in response to stringent international environmental regulations.
Among its core subsidiaries, the newly integrated HD Hyundai Heavy Industries emerged as a primary growth driver. Following its strategic merger with HD Hyundai Mipo in December, the company posted substantial revenue of 5.92 trillion won and a robust operating profit of 905.4 billion won, underscoring the success of its consolidation efforts.
Consistent performance was also observed at HD Hyundai Samho, which maintained solid earnings momentum with revenue reaching 2.12 trillion won and operating profit hitting 395.2 billion won, both reflecting an impressive 8 percent year-on-year increase. Notably, HD Hyundai Marine Engine demonstrated exceptionally strong growth, with its revenue surging 60.8 percent to 133.5 billion won and operating profit skyrocketing 216.5 percent to 32.6 billion won.
HD Hyundai Energy Solutions achieved a remarkable turnaround, driven by a surge in module sales both domestically and internationally, alongside favorable higher selling prices. Its revenue dramatically climbed 87.6 percent year-on-year to 159.9 billion won, marking a significant return to profitability with an operating profit of 29 billion won.
During its subsequent earnings call, HD KSOE outlined an ambitious full-year order target of $17.03 billion. Having already secured $6.39 billion in the first quarter, the company has successfully achieved 37.5 percent of its annual goal. This robust order intake for 60 vessels between January and March was significantly bolstered by high-value ship segments, including state-of-the-art liquified natural gas (LNG) carriers, very large gas carriers (VLGCs), advanced container vessels, and diverse tankers.
Despite prevailing geopolitical uncertainties, HD KSOE expressed confidence in the enduring resilience of the global shipbuilding market. This optimism is supported by robust freight rates and a renewed surge in investment demand for LNG infrastructure and vessels, particularly evident in the United States.
While acknowledging potential impacts from the Middle East conflict on energy demand and possible delays in shipowners’ investment decisions, HD KSOE maintains a strong positive outlook for the mid- to long-term. This perspective is anchored in several key growth drivers for the maritime industry, including increasingly stringent global environmental regulations, the accelerating global energy transition, and the ongoing critical demand for replacing aging maritime fleets with modern, efficient alternatives.
