Hanwha Ocean posts $54.9M operating profit for Q3

Hanwha Ocean, previously Daewoo Shipbuilding & Marine Engineering, reported a Q3 operating profit of $54.9 million, beating market expectations, thanks to higher sales of LNG vessels and improved productivity.

[HANWHA OCEAN]

Hanwha Ocean earned a profit for the first time since the fourth quarter of 2020, taking into account the performance of its previous identity as Daewoo Shipbuilding & Marine Engineering, recording 74.1 billion won ($54.9 million) in operating profit.

The profit record far exceeds the market consensus of 3.5 billion won, which was compiled by market tracker FnGuide.

The shipbuilding company credited the return to profitability to higher sales of LNG vessels and enhanced productivity, being the first in the industry to successfully conclude wage negotiations.

Third-quarter revenue increased by 95.3 percent compared to the same period last year, reaching 1.92 trillion won. However, it fell short of the market consensus by 6.4 percent, amounting to 2.47 trillion won.

In addition, Hanwha Ocean achieved a net profit of 231.6 billion won, an increase of 266.5 percent compared to the market consensus of 63.2 billion won.

“Since our rebranding as Hanwha Ocean in May, we have been dedicated to enhancing our management structure and restructuring the organization to boost efficiency and productivity, and the positive impact has become evident starting from the third quarter,” the company explained Wednesday.

“Our recent success in an arbitration lawsuit, regarding the return of advance payments for two drillships, has also helped to boost both operating and net profits,” it added.

Hanwha Ocean said it has secured orders equivalent to approximately three years of work, and highlighted that 66 percent of its remaining orders for 99 commercial ships are highly profitable LNG carriers. Consequently, the company expects to maintain profitability in the fourth quarter and beyond.

Hanwha Ocean in August announced its transition toward becoming a “solution provider” in areas such as defense, eco-friendliness, offshore wind power, and smart yards. The company aims to achieve 30 trillion won of revenue and 5 trillion won of operating profit by 2040 through the strategic shift.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]