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HHI REVENUES IMPROVE

Friday, July 26, 2019 

Hyundai Heavy Industries' earnings improved thanks to profitability recovery at Hyundai Oilbank and other subsidiaries. Shipbuilding division mid-holding company Korea Shipbuilding & Marine Engineering also maintained a profit in the quarter, but Hyundai Heavy Industries turned to the deficit due to deteriorating earnings at offshore plant division.

Hyundai Heavy Industries said: "The effect of the reversal of the deficit provision in the first quarter has disappeared, and the offshore plant division's earnings have been sluggish. 

Hyundai Heavy Industries Co., Ltd. recorded consolidated sales of KRW6,821.7 billion and operating income of KRW201.9 billion in 2Q. Sales and operating profit increased by 5.1% and 39.7%, respectively, from the previous quarter (sales of KRW6,915 billion, operating profit of KRW144.5 billion). 

Revenues increased QoQ due to increased sales at Hyundai Oilbank due to higher average oil prices and higher sales of technical services at Hyundai Global Services.

Operating profit remained on the positive side due to the improvement in profit from refining margins in the refining sector and the favorable exchange rate effect caused by the won depreciation. Hyundai Global Services also contributed to earnings improvement by increasing profits thanks to an increase in sales of technical services such as eco-friendly shipbuilding, which is highly profitable.

Korea Shipbuilding & Marine Engineering (KOSDAQ) posted sales of W3.92 trillion, up 19.8% QoQ and 25.1% YoY on the back of increased shipbuilding volume and won depreciation. 
 
Operating profit continued to surplus, with sales of subsidiaries Hyundai Mipo Dockyard and Hyundai Samho Heavy Industries improved to W55.4bn. However, Hyundai Heavy Industries lost an operating loss of 57.1 billion won due to the sluggish offshore plant division.

A Hyundai Heavy Industries Group spokesperson said: "shipbuilding orders in the global market have been lower than expected due to uncertainties in the global economy due to the effects of the US trade disputes in the first half of the year." In the second half of the year, We will do our best to win orders based on our technology. "

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