HD Hyundai's Q3 operating profit sinks over reduced operating days

[HD HYUNDAI]

HD Hyundai's third-quarter operating profit went down by 37.7 percent on-year to 667.7 billion won ($491.31 million) due to reduced operating days in the shipbuilding and oil sectors.

The figure fell short of the market consensus at 753.7 billion won compiled by market tracker FnGuide.

The Korean shipbuilding, oil refining and machinery conglomerate's revenue amounted to 13.7 trillion won, a 20.6 percent decrease compared to the previous year. It was still lower than the market consensus of 14.84 trillion won.

Net profit stood at 595.2 billion won, far beating the market consensus of 55 billion won.

HD Hyundai explained that in the shipbuilding and oil sectors "compared to the preceding quarter, the revenue declined by 12.2 percent due to fewer operating days, but the operating profit increased by 41.3 percent thanks to improved performance in the oil and power equipment sectors, as well as solid results in key businesses such as shipbuilding and construction machinery."

In the shipbuilding sector, HD Korea Shipbuilding & Offshore Engineering's revenue decreased by 8.1 percent on-year to 5.1 trillion won, due to seasonal factors. Yet the operating profit remained in the black for the second consecutive quarter, amounting to 69 billion won, thanks to improved performance in its affiliates.

In the oil sector, HD Hyundai Oilbank posted 5.8 trillion won in revenue and an operating profit of 319.1 billion won. Despite a decrease in revenue due to the regular maintenance of oil refining facilities, international oil prices rose due to ongoing oil production cuts in major oil-producing countries. This, along with increased demand, including seasonal factors, resulted in a 783.9 percent increase in operating profit compared to the previous quarter.

"The shipbuilding sector continues to maintain profitability, and strong performance in key areas such as oil refining, construction machinery, and power equipment is expected to sustain stable performance in the fourth quarter," an official from HD Hyundai said.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]