HHIH reports 186 billion won net profit in 2021

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HHIH reports 186 billion won net profit in 2021

A liquefied natural gas carrier made by Korea Shipbuilding & Offshore Engineering [KOREA SHIPBUILDING & OFFSHORE ENGINEERING]

A liquefied natural gas carrier made by Korea Shipbuilding & Offshore Engineering [KOREA SHIPBUILDING & OFFSHORE ENGINEERING]

 
Hyundai Heavy Industry Holdings (HHIH) reported a net profit of 186 billion won ($155 million) last year from a net loss of 789.7 billion won in 2020.  
 
Revenue rose 48.9 percent on year to 28.16 trillion won.
 
The company owns 30.95 percent of Korea Shipbuilding & Offshore Engineering (KSOE), 74.13 percent of Hyundai Oilbank and 100 percent of Hyundai Genuine, a construction company.  
 
Operating profit surged to a record high 1.08 trillion won compared to a loss of 597.1 billion won in 2021.  
 
In the fourth quarter, it reported a net loss of 189.6 billion won from a loss of 451 billion won in the year-earlier period.  
 
Revenue rose 83.8 percent on year to 8.5 trillion won. Operating profit stood at 64.7 billion won from a loss of 315.3 billion won a year earlier.    
 
KSOE, which has a majority stake in Hyundai Heavy Industries and a minority stake in Hyundai Mipo Dockyard, reported a net loss of 1.14 trillion won in 2021, widening from a loss of 835.2 billion won in the year-earlier period.
 
Revenue was 15.5 trillion won, up 4 percent on year. It reported an operating loss of 1.4 trillion won from an operating profit of 74.4 billion won in the year-earlier period.  
 
In the fourth quarter, the company reported a net loss of 675.3 billion won from a net loss of 923.5 billion won in the year-earlier period.  
 
It logged revenue of 4.46 trillion won, up 24.7 percent on year. KSOE credited rising shipbuilding orders for the increase, especially for profitable vessels such as liquefied natural gas and liquefied petroleum gas carriers.
 
In the fourth quarter, its operating loss was 696.7 billion won, from a 180.9 billion won loss in the year-earlier period.
 
KSOE said new compensation expenses have been reflected in its earnings. The Supreme Court last December ruled that Hyundai Heavy Industry regular bonuses should be recognized as regular wages, which would increase retirement pay.  
 
The company's net loss was not as big as it could have been due to the sale of Hyundai Heavy Industries Brasil-Manufacturing and Trading of Construction Equipment to Hyundai Construction Equipment.  
 
Revenue is expected to continue to rise this year, considering the shipbuilder already has a fat order book. KSOE received orders for 34 vessels worth $3.7 billion through Feb. 3 this year, 21.2 percent of its annual target.  
 
The shipbuilding business is booming. Daewoo Shipbuilding & Marine Engineering received orders for 11 vessels and one offshore plant through Feb. 3 this year, worth $2.72 billion.  
 
Steel plate price increases could keep shipbuilders in the red.  
 
Iron ore, a key material to make steel plates for ships, traded at $89.83 per ton last Nov. 19, the lowest price last year. Since hitting the low, the price has been on the rise. It traded at $146.78 per ton on Feb. 4, up 15.46 percent on month.  
 
KSOE said during its Monday conference call that it is currently negotiating steel plate prices with steelmakers, and that prices "will not dramatically rise, but also not dramatically fall as well."
 
Steel plate prices were negotiated with major shipbuilders in August last year, and the price was set at around 1.1 million won per ton, a jump of almost 60 percent on year.
 
 
 
 
 

BY LEE TAE-HEE [lee.taehee2@joongang.co.kr]
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