On February 21, Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering officially released its 2023 financial report. The report shows that, preliminarily, Hanwha Ocean’s operating income for 2023 was KRW 7.408 trillion, up 52.4 % year-on-year. The operating loss of 196.5 billion won was significantly reduced from the loss of 1.6136 trillion won in the same period last year. The net profit of 160 billion won is a sharp reversal of last year’s net profit loss of 1.74 trillion won and a turnaround of annual net profit after two years.
Hanwha Ocean said the earnings growth was driven by an increase in shipbuilding volume and a higher proportion of sales of liquefied natural gas (LNG) carriers. Although Hanwha Ocean has won a case related to compensation for delayed ship delivery, its profitability has been affected by one-time expenses.
By business type, Hanwha Ocean’s merchant marine business operating income for 2023 is KRW 5.81 trillion, up 38.0% year-on-year, and operating loss is KRW 482.8 billion, narrowing by more than KRW 600 billion year-on-year. In 2024, Hanwha Ocean’s merchant marine operating income is expected to expand to 80% of total operating income based on the delivery of large container vessels and the batch construction of high value-added LNG carriers.
In October 2023, Hanwha Ocean announced planned to build four large LNG carriers simultaneously at the Geoje Shipyard No. 1 Dockyard. With the above as a benchmark, Geoje Shipyard No. 1 Dockyard will continue to build this high value-added vessels. And No. 2 Dockyard at Geoje Shipyard will also start building LNG carriers from 2024.
Hanwha Ocean sources said, “In the first half of 2024, the company expects to deliver more than 20 LNG carriers and large container ships. Based on this, Hanwha Ocean’s profit and loss situation is expected to improve significantly in the second half of this year.”
In 2023, Hanwha Ocean’s offshore operating revenue increased 382.8% year-on-year to KRW977.1 billion, and operating profit was KRW146.5 billion, turning positive compared to the previous year (-KRW65.1 billion). This year, orders for oil and gas products such as oil production facilities (FP) and offshore gas field control systems (FCS) of Hanwha Ocean are expected to account for more than 10% of it’s annual operating revenue.
In addition, Hanwha Ocean’s financial strength was significantly improved through two capital increases last year. During this period, the total debt fell 16.2 % from KRW 11.49 trillion to KRW 9.63 trillion. As a result, the company’s gearing ratio stood at 223.4 % as of the end of last year, up 1,319.2 percentage points from the same period last year (1,542.6 %).