HD Korea Shipbuilding & Offshore Engineering (009540) Q1 2026 earnings summary

Executive summary

• Q1 2026 consolidated results include HHI after the merger with Mipo, completed in December 2025.

• Revenue was 8,140.9 bn KRW, up 20.2% year-over-year and nearly flat sequentially, despite fewer working days.

• Operating profit surged 30.6% quarter-over-quarter and 57.8% year-over-year to 1,356.0 bn KRW, driven by productivity, vessel mix, and merger synergies.

• Net income rose 14.9% quarter-over-quarter and 86.6% year-over-year to 1,141.4 bn KRW.

• No one-off items impacted consolidated results; earnings improvement was driven by productivity, vessel mix, and merger synergies.

Financial highlights

• Consolidated revenue up 20.2% year-over-year, down 0.1% quarter-over-quarter at 8,140.9 bn KRW.

• Operating profit up 30.6% quarter-over-quarter and 57.8% year-over-year to 1,356.0 bn KRW.

• Operating profit margin reached 18.6%, a significant improvement over Q4.

• Gross profit increased 18.9% quarter-over-quarter and 50.2% year-over-year to 1,744.6 bn KRW.

• All major subsidiaries maintain a net cash position; consolidated net cash is KRW 8.7 trillion.

Outlook and guidance

• Order intake in Q1 reached 37.5% of the full-year target, with 60 vessels secured.

• Market outlook remains robust, with Clarksons forecasting 2026 global new building orders at 115.7 million GT.

• Strategic focus on high-value vessels and selective order intake to maintain profitability.

• Offshore segment expects stable revenue through Q1 2027, but warns of potential decline if no new orders are secured.

• Management expects continued productivity gains and favorable product mix to support profitability.