HD Hyundai, under the leadership of Chairman Chung Ki-sun, is experiencing rapid growth, buoyed by strong performances from its core subsidiaries. The shipbuilding, construction equipment, and power equipment sectors are all contributing to this success, reinforcing Chung's management capabilities.
According to a disclosure on October 28, the group's holding company, HD Hyundai, reported a consolidated operating profit of 2.92 trillion won for the third quarter of this year, marking a 71.5% increase compared to the same period last year. Revenue also rose by 21.2% to 22.08 trillion won during the same timeframe.
The shipbuilding sector has been the primary driver of HD Hyundai's improved performance. HD Korea Shipbuilding & Marine Engineering recorded third-quarter sales of 8.29 trillion won and an operating profit of 1.45 trillion won, representing increases of 9.3% and 37.3%, respectively, from the previous year. Notably, the cumulative operating profit for the first three quarters of this year has already surpassed last year's annual record, reaching 4.45 trillion won.
HD Hyundai Heavy Industries, a key subsidiary, achieved sales of 5.75 trillion won and an operating profit of 899.2 billion won, reflecting increases of 30.2% and 61.3% year-on-year. HD Hyundai Samho also benefited from a greater share of high-value ships, such as liquefied natural gas (LNG) carriers, resulting in a 56.3% rise in operating profit to 479 billion won.
Additionally, the construction equipment and power equipment sectors showed notable improvements in profitability this quarter. HD Construction Equipment, formed from the merger of HD Hyundai Construction Equipment and HD Hyundai InfraCore in January, reported third-quarter sales of 2.09 trillion won and an operating profit of 157.7 billion won, marking increases of 6.1% and 23.9%, respectively, compared to the combined performance of the two companies last year.
HD Hyundai Electric also achieved record sales in the third quarter, driven by growth in its generator and new business sectors. Sales reached 1.18 trillion won, with an operating profit of 284.5 billion won, up 18.5% and 15.1% year-on-year, respectively. The demand for distribution transformers, particularly in the semiconductor industry, and increased sales of distribution equipment in North America contributed to this growth.
The energy sector also contributed to the group's overall profits. HD Hyundai Oilbank reported third-quarter sales of 10.04 trillion won and an operating profit of 900.9 billion won. However, the petrochemical business faced challenges, turning to a loss due to reduced product spreads amid global oversupply.
Industry observers believe this year will be a pivotal moment for Chairman Chung to demonstrate his leadership. Since being promoted to chairman in October of last year, he has directly led efforts to strengthen the competitiveness of core businesses, restructure the portfolio, and foster new ventures.
Chung is particularly focused on leveraging the engine technology accumulated in the shipbuilding sector to expand into land-based power generation, accelerating the acquisition of new revenue sources. In fact, HD Hyundai Heavy Industries secured a contract worth approximately 1.6 trillion won for power generation equipment supply in the U.S. with its independently developed 'Himsen Engine.'
In the U.S., the company has signed a joint venture agreement with construction and engineering firm Kiewit to establish a local shipyard and produce ship blocks and modules, further broadening its business scope.
However, despite these management achievements, succession planning remains a challenge. In September, Chung received a 3.54% stake in HD Hyundai from his father, Chung Mong-joon, chairman of the Asan Foundation, making him the second-largest shareholder. Nevertheless, Chung Mong-joon still holds a 23.05% stake as the largest shareholder.
The key variables in the succession process will be how Chung secures additional shares to establish stable control and how he plans to fund the payment of gift and inheritance taxes.
* This article has been translated by AI.
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