HD Hyundai Heavy Industries (329180) Q3 2024 earnings summary

Executive summary

• Sales for 3Q24 decreased 7.1% quarter-over-quarter but rose 26.5% year-over-year, with net income turning to a profit of 722 billion KRW, a significant improvement from prior losses.

• Revenue for the nine months ended September 30, 2024, was ₩10,480.9 billion, with operating income of ₩423.0 billion and net income attributable to owners of ₩254.9 billion, marking a significant turnaround from the prior year’s net loss.

• The company maintained strong order backlogs, with a period-end order book of ₩43,957.5 billion, supporting future revenue visibility.

• The business is diversified across shipbuilding, offshore plants, and engine/machinery, with shipbuilding contributing over 72% of consolidated sales.

• Operating profit increased 5.4% quarter-over-quarter, driven by a one-off gain in Offshore and improved Engine margins.

Financial highlights

• 3Q24 sales: 3,609.2 billion KRW; operating profit: 206.1 billion KRW; net income: 722 billion KRW.

• Revenue decreased 12.4% year-over-year to ₩10,480.9 billion, while operating profit more than doubled to ₩423.0 billion from ₩178.6 billion in the prior year.

• Net income swung to a profit of ₩254.9 billion from a loss of ₩289.2 billion year-over-year.

• Operating profit margin improved to 5.7% from 5.0% in 2Q24 and 0.5% in 3Q23.

• Non-operating income turned negative, mainly due to financial costs and foreign exchange losses.

Outlook and guidance

• Offshore segment benefited from a one-off gain related to a project change order.

• Engine & Machinery segment maintained robust margins through productivity and product mix improvements.

• The company expects continued strong demand for eco-friendly and dual-fuel vessels, with a robust order backlog supporting stable revenue through 2026.

• Ongoing investments in production capacity and R&D are aimed at maintaining technological leadership in green shipping and offshore energy solutions.