HD Hyundai Heavy Industries (329180) Q1 2025 earnings summary

Executive summary

• 1Q25 sales reached KRW 3,822.5bn, up 27.9% year-over-year but down 4.6% quarter-over-quarter, with operating profit of KRW 433.7bn, a 53.7% quarter-over-quarter surge driven by FX tailwinds and productivity gains.

• Net income attributable to controlling interest was KRW 284.2bn, down 22.5% quarter-over-quarter but up 893.7% year-over-year.

• The company ended the quarter with KRW 2,867.8bn in cash and cash equivalents, maintaining a strong liquidity position.

Financial highlights

• Operating profit margin improved to 11.3% from 7.0% in 4Q24 and 0.7% in 1Q24, with gross profit margin rising to 16.5% from 5.0% year-over-year.

• Non-operating profit was impacted by FX losses and financial costs, reducing income before taxes.

• Debt-to-equity ratio increased to 260.05% from 239.93% at the end of 2024.

• Interest coverage ratio improved to 17.80x from 0.47x year-over-year.

• Cash flows from operating activities were KRW 1,704.7bn, up from KRW 311.0bn in Q1 2024.

Outlook and guidance

• Productivity enhancements and favorable FX are expected to continue supporting margins.

• The company plans to focus on high-value, eco-friendly vessels and expand into new energy sectors such as offshore wind and SMR.

• Ongoing investments in production capacity and R&D are expected to support future growth.

• Segment performance improvements anticipated, especially in shipbuilding and engine & machinery.