HD Korea Shipbuilding & Offshore Engineering (009540) Q3 2024 earnings summary

Executive summary

• 3Q24 sales decreased 5.6% sequentially but rose 24.6% year-over-year, mainly due to fewer working days but strong prior-year growth.

• Operating profit increased 5.8% QoQ and 477.4% YoY, driven by improved performance at shipbuilding subsidiaries and the incorporation of HME.

• Net income dropped 50.7% QoQ and 49.0% YoY, reflecting significant non-operating losses.

Financial highlights

• 3Q24 sales: KRW 6,245.8bn; operating profit: KRW 398.4bn; net income: KRW 176.4bn.

• Operating margin improved to 6.4% from 5.7% in 2Q24 and 1.4% in 3Q23.

• Gross profit was KRW 706.8bn, nearly flat QoQ but up 138.1% YoY.

• Non-operating income swung to a loss of KRW -181.5bn in 3Q24.

Outlook and guidance

• Management notes that future performance is subject to market and operational uncertainties, with guidance based on current conditions and subject to change.