Hanwha Ocean recorded an “earnings surprise” in the second quarter of this year, driven by strong performance in its commercial and special vessel businesses.
Hanwha Ocean announced on the 27th that it achieved sales of 5.4332 trillion Korean won and operating profit of 736.1 billion Korean won on a consolidated basis in the second quarter. Sales increased by 65.2% compared to the same period last year and 69.6% compared to the previous quarter. Operating profit rose by 98% year-on-year and 66.9% quarter-on-quarter. Net profit surged to 692.6 billion Korean won, a 366.4% increase from the same period last year.
For the first half of the year, the company achieved cumulative sales of 8.6531 trillion Korean won and operating profit of 1.1772 trillion Korean won. This marks a 34% increase in sales and an 87% rise in operating profit compared to the same period last year.
According to the company, the sales growth was driven by improved operational efficiency, expanded production volume, and the one-time recognition of approximately 1.5 trillion Korean won in marine project revenue based on delivery standards in this quarter.
The increase in operating profit was attributed to favorable external conditions such as ship prices and exchange rates, combined with cost improvements from reduced material expenses and enhanced productivity. Additionally, the company’s profitability improved through the recognition of high-margin projects like LNG carriers and optimized volume and pricing across vessel types.
In the first half of this year (as of the end of June), Hanwha Ocean secured orders worth a total of 4.35 billion dollars, including six LNG carriers, 15 very large crude carriers (VLCCs), three very large ammonia carriers (VLACs), and one wind turbine installation vessel (WTIV). The company’s order backlog, based on delivery standards, stands at 153 vessels and 33.77 billion dollars. Among these, LNG carriers account for 57 vessels and 14.46 billion dollars, representing over 40% of the total backlog.
The outlook for the second half of the year is also positive. The commercial vessel division expects continued revenue recognition from high-priced projects, including VLCCs and container ships, alongside steady improvements in sales and operating profit as the production of high-margin orders secured since 2024 ramps up. The special vessel division anticipates a slight increase in sales as the Jang Bogo-III Batch-II No. 2 vessel and the Ulsan-class Batch-III Nos. 5 and 6 vessels enter mass production.
Following the launch of the Batch-II No. 1 vessel, the ROKS Jang Yeong-sil, in April, the No. 2 vessel is scheduled for launch in 2026 and delivery in 2028. While fixed costs are expected to rise, the company plans to improve profitability through change orders and cost reductions.
The energy plant division expects sales recovery in the second half due to new project launches, though fixed costs from partial project gaps will persist. The company aims to secure additional revenue by accelerating project deliveries and negotiating with clients to obtain change orders and incentives.
Source: The ChosunDaily
