HD Korea Shipbuilding & Offshore Engineering (009540) Q4 2025 earnings summary

Executive summary

• Q4 2025 sales rose 7.5% quarter-over-quarter and 13.8% year-over-year, driven by productivity gains and higher vessel prices at major subsidiaries.

• Operating profit decreased 1.5% quarter-over-quarter but surged 108% year-over-year, impacted by one-off incentive bonuses and the absence of prior quarter gains.

• Net income increased 13.3% quarter-over-quarter and 36.6% year-over-year, reflecting strong operational performance.

• Profitability continues to improve steadily, excluding one-off items.

Financial highlights

• Q4 2025 sales reached KRW 8,151.6bn, operating profit KRW 1,037.9bn, and net income KRW 993.0bn.

• FY25 sales totaled KRW 29,933.2bn, up 17.2% year-over-year; operating profit KRW 3,904.5bn, up 172.3% year-over-year.

• All shipbuilding subsidiaries maintain a net cash position totaling KRW 6.2 trillion.

• Gross margin improved significantly, with gross profit up 105.3% year-over-year for FY25.

• Non-operating profit benefited from significant FX valuation gains.

Outlook and guidance

• Expectation of stable and solid performance in offshore and engine divisions for 2026.

• Shipbuilding order intake exceeded annual targets, with $17.4 billion in orders, 116% of the group’s 2025 target.

• Market volatility anticipated in 2026 due to geopolitical factors, but order competitiveness and shareholder value remain priorities.

• Management notes that forecasts are subject to market and strategic changes, with inherent uncertainties in predictive information.