HD KSOE's Operating Profit Rises 37% in Third Quarter of 2026

HD Korea Shipbuilding & Offshore Engineering (HD KSOE) released mixed results for the third quarter of 2026 on October 28. The company posted an operating profit of 1,447.2 billion won, up 37.3% from the same period last year, though down 12% from the previous quarter. Sales reached 8,286.2 billion won, up 9.3% year-on-year but down 7.2% sequentially. The operating margin stood at 17.5%, beating earnings-per-share forecasts even as revenue fell short of analysts' expectations.

The company attributed the sequential drop to fewer working days, the won's appreciation against the dollar, and extraordinary costs tied to a wage agreement at HD Hyundai Heavy Industries (HHI), finalized on October 27 between management and the union. About 75% of these additional labor costs were booked in the third quarter, with the remainder to be recognized in the fourth. The company noted that higher vessel prices and productivity gains drove the year-on-year improvement.

The shipbuilding segment remained the main contributor, with sales of 6,839.3 billion won and an operating profit of 1,145.3 billion won, a 16.7% margin, despite an 8.2% drop in sales from the previous quarter. The offshore business staged a strong recovery, posting an operating profit of 126.4 billion won and a 33.3% margin, driven by progress on the Ruya project and the recognition of 18 billion won in change orders. The engine and machinery division generated 1,201.2 billion won in sales with a 24.2% margin, while HD Hyundai Marine Engine achieved a record operating margin of 28.5%, with revenue up 65% from the second quarter, supported by a higher share of dual-fuel engines.

Net profit came in at 777 billion won, down 51.3% from the previous quarter and 11.4% compared to the same period in 2025, the company reported. The gap was mainly due to foreign exchange losses of 610.2 billion won resulting from the won's appreciation against the dollar. Despite this, HD KSOE's financial position remained solid, with net cash of 11.17 trillion won at the end of the quarter.

As of the end of September, HD KSOE had secured orders for 176 vessels totaling 19.1 billion dollars, already surpassing its full-year target, with a market share of over 50% in the global gas carrier and large ammonia carrier markets. Cumulative operating profit from January to September exceeded the company's previous annual record, set in 2025. For the fourth quarter, the company expects offshore business revenue to decline as the Trion project nears completion, while anticipating further profitability improvements in the engine business despite persistent currency pressure.