On May 18, HJ Heavy Industries announced that it recorded consolidated sales of 541.4 billion won, an operating profit of 24.6 billion won, and a net income of 25.5 billion won for the first quarter. Sales increased by 32.0% from 410 billion won in the same period last year, while operating profit rose from 5.5 billion won to 24.6 billion won, marking a 347.3% increase. Net income also saw a significant jump from 5.6 billion won to 25.5 billion won, a 355.4% rise.
The substantial improvement in performance is attributed to the realization of high-value ship construction orders in the shipbuilding sector and the recovery of cost structures in the construction division. Notably, sales in the shipbuilding sector increased by 70%, from 158.1 billion won to 268.6 billion won. In comparison, sales in the construction sector grew by 8.6%, from 247.9 billion won to 269.3 billion won, indicating a remarkable growth trajectory.
Analysts credit the profitability to strategies focused on developing eco-friendly vessels, selecting orders based on cost advantages, and prioritizing key projects such as fast patrol boats. The construction division also successfully maintained profitability by managing cost structures amid a slowdown in domestic and international construction markets and rising raw material and labor costs.
HJ Heavy Industries aims to continue its profitable management through a focus on 'qualitative growth' centered on profitability this year. Following the orders received at the end of last year for four new fast patrol boats for the navy, a multi-purpose chemical response vessel for the coast guard, and maintenance, repair, and overhaul (MRO) contracts with the U.S. Navy, the company also secured orders for four 11,000 TEU container ships earlier this year. The goal is to establish a virtuous cycle where quality work leads to improved profitability through various public projects and maintenance contracts.
Additionally, the recent move to acquire HD Hyundai's Gunsan Shipyard has heightened expectations for long-term growth. If the acquisition proceeds as planned, HJ Heavy Industries is expected to enhance its production capacity and ability to respond to additional orders based on the Gunsan Shipyard.
A representative from HJ Heavy Industries stated, "As the proportion of high-profit projects focused on eco-friendly and high-value vessels increases, our operating profit has significantly risen compared to the same period last year. With stable order backlogs secured for over three years across both major business sectors, we will continue to pursue stable growth through ongoing improvements in our structure and cost management."
* This article has been translated by AI.
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