Hanwha Ocean’s Q3 operating profit surges elevenfold year-on-year

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Hanwha Ocean’s Q3 operating profit surges elevenfold year-on-year

Published: 27 Oct. 2025, 17:39 Updated: 27 Oct. 2025, 19:28

Audio report: written by reporters, read by AI

A large crane and a ship under construction are visible at Hanwha Ocean's shipyard in Geoje, South Gyeongsang, on Aug. 26. [NEWS1]

Hanwha Ocean’s third-quarter operating profit surged more than elevenfold compared to the same period last year, driven by a focus on high-value shipbuilding contracts such as liquefied natural gas (LNG) carriers and specialty vessels.

In a preliminary earnings report released on Monday, Hanwha Ocean reported consolidated third-quarter revenue of 2.0234 trillion won ($1.41 billion), operating profit of 289.8 billion won and net profit of 269.4 billion won.

Compared to the same period last year, revenue rose by 11.8 percent, while operating profit jumped by 1,032 percent. Net profit also swung to the black from a loss. On a cumulative basis for the year, the company has posted 9.46 trillion won in revenue and 920.1 billion won in operating profit.

Compared to the previous quarter, revenue and operating profit fell by 8 percent and 22 percent, respectively. The company cited reduced working days due to summer holidays and one-time costs tied to a recently concluded wage and collective bargaining agreement.

“Although fixed costs temporarily increased, our annual profitability remains solid,” the company said.

The commercial ship division led the gains, with strong deliveries of high-value vessels such as LNG carriers. Despite fewer working days, the division maintained double-digit operating margins.

Hanwha Ocean executives pose for a photo during the launching ceremony for the Jangbogo-III Batch-II submarine at the company's shipyard in Geoje, South Gyeongsang, on Oct. 22. [YONHAP]

“LNG carriers account for about 60 percent of our total revenue, and we plan to maintain this proportion going forward,” a company official said.

The specialty ship division also saw marked growth, particularly in defense-related shipbuilding. Revenue rose 58 percent from the previous quarter, driven by the full-scale construction of the second Jangbogo-III Batch-II submarine, the start of work on the fifth and sixth Ulsan-class Batch-III frigates, and maintenance, repair and overhaul (MRO) services for the U.S. Navy.

Meanwhile, revenue and profit in the offshore division declined slightly as existing projects approached completion. The company said it aims to grow this segment into a stable mid- to long-term revenue stream by targeting demand in environmentally friendly energy and carbon capture and storage (CCS)–based offshore plant markets.

The outlook for earnings remains positive.

“With revenue from high-value projects secured since 2023 now being recognized, we expect steady growth in operating profit,” Hanwha Ocean said. “We will continue focusing on profitability-driven contracts to enhance the stability of our performance.”

A large crane and a ship under construction are visible at Hanwha Ocean's shipyard in Geoje, South Gyeongsang, on Aug. 26. [NEWS1]

Expectations are also rising for overseas defense orders toward the end of the year. Hanwha Ocean was recently shortlisted for Canada’s next-generation submarine program (SSCN), a roughly 60 trillion won project to build 12 submarines. The company is bidding as part of the “One Team Korea” consortium with HD Hyundai.

Also drawing attention is Poland’s 8 trillion won Orca Project.

“Government-to-government negotiations are actively underway, and we will strive for the best outcome by leveraging our advanced submarine technology and customized proposals,” Hanwha Ocean said during a conference call following the earnings announcement.

“Demand for submarines and surface ships is also rising in Europe and Southeast Asia,” the company added. “We will open new export markets through success in global submarine programs and surface vessel development.”

“We will also strengthen our competitiveness in specialty ships through localization strategies and extensive naval operation experience,” the company further said.

Visitors look at models of various ships on display at the Hanwha Ocean booth during a shipbuilding exhibition at BEXCO Exhibition Center in Busan on Oct. 21. [SONG BONG-GEUN]

“This performance reflects the continued rise in ship prices through last year,” said Yang Jong-seo, senior researcher at the Korea Eximbank Overseas Economic Research Institute. “If the focus on high-value ship orders continues, strong results can be expected going forward.”

Meanwhile, HD Korea Shipbuilding & Offshore Engineering — the shipbuilding holding company under HD Hyundai — will release its third-quarter results on Nov. 3.

Analysts expect the combined operating profit of Korea’s big three shipbuilders — HD Korea Shipbuilding, Hanwha Ocean and Samsung Heavy Industries — to reach 1.5 trillion won for the quarter.

Samsung Heavy Industries, which released its results on Thursday, reported 238.1 billion won in operating profit for the third quarter, up 99 percent from the same period last year.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY PARK YOUNG-WOO [[email protected]]