Hanwha Solutions, KSOE close Q3 with robust OP, sales growth

South Korea¡¯s Hanwha Solutions Corp. and Korea Shipbuilding & Offshore Engineering Co. closed the third quarter with better-than-expected earnings thanks to strong demand for eco-friendly renewable energy worldwide.

The chemical manufacturing unit under South Korean conglomerate Hanwha Group in its regulatory filing on Thursday said its consolidated operating profit for the quarter ended September reached record-high 348.4 billion won ($245.2 million), gaining 25.4 percent from a quarter ago and 95.3 percent from a year earlier.

Its net profit however lost 43.3 percent on quarter and 28.4 percent on year to 138.6 billion won, while sales fell 0.7 percent from three months ago but added 30.4 percent against the previous year to total 3.37 trillion won.

Hanwha Solutions shares were trading 3.77 percent lower at 49,750 won in Seoul trading at 9:55 a.m. Friday after closing the previous session 7.04 percent higher at 51,700 won. The stock soared more than 70 percent from this year¡¯s bottom and 45 percent from the beginning of the year.

The renewable energy business successfully swung to an operating profit of 197.2 billion won, with sales up 61 percent on year to 1.33 trillion won as the world is rapidly shifting toward clean energy to achieve carbon neutrality and energy security. Demand for green energy sources is so high especially in the United States and Europe where the company has faced with photovoltaic module shortages.

The chemical business saw its operating profit fall 55 percent to 119.7 billion won due to decreased margin from rising naphtha prices amid higher oil prices. Sales grew 12.1 percent to total 1.47 trillion won during the period.

The advanced materials business delivered an operating profit of 19.8 percent on sales of 312.7 billion won.

Korea Shipbuilding & Offshore Engineering, the shipbuilding holding entity of Hyundai Heavy Industries Group, also disclosed in a filing on the same day that it successfully reversed to an operating profit of 188.8 billion won in the third quarter ended September on a consolidated basis from a loss of 265.1 billion won a quarter ago. Against a year ago, the operating profit gained 33.2 percent.

The company also generated a net profit of 315.9 billion won, swinging from a loss of 105.6 billion won from three months ago and adding 64 percent against a year earlier. Sales rose 1.8 percent on quarter and 19.9 percent on year to total 4.26 trillion won.

Third-quarter earnings growth was largely owed to its efforts to improve the vessel portfolio and the weak Korean currency against the U.S. dollar on top of its efforts to reduce costs, the company explained.

KSOE shares were trading 2.93 percent higher at 73,700 won in the morning trade Friday after closing the previous year 3.32 percent up at 71,600 won.

The shipbuilding division earned an operating profit of 221.5 billion won, rising 16.6 percent on year, with sales up 18.7 percent to 3.56 trillion won on increased orders for LNG carriers, which are more expensive to build.

The marine and plant division reported an operating loss of 48 billion won due to unrecovered fixed costs despite a 40.3 percent growth of sales that amounted to 208.5 billion won.

KSOE this year has added $22.15 billion worth orders for 186 vessels, exceeding this year¡¯s full-year target of $17.44 billion.

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