Hanwha Ocean Co., South Korea’s third-largest shipbuilder, turned to the black in the first quarter powered by increasing sales of higher-end vessels and a weaker won currency, adding to hopes for further earnings improvement, according to the company's release.
Hanwha Ocean said on Wednesday it reported an operating profit of 52.9 billion won ($38.6 million) on a consolidated basis in the January-March period, swinging from a loss of 62.8 billion won a year earlier, as sales surged 58.6% to 2.3 trillion won. The formerly Daewoo Shipbuilding & Marine Engineering Co. logged a quarterly net profit of 51 billion won, compared with a loss of 120.4 billion won a year ago.
South Korea’s chemicals-to-defense conglomerate Hanwha Group acquired Daewoo for 2 trillion won last year and rebranded it as Hanwha Ocean, according to KED Global.
The company said sales and profits grew on the increasing production of high-value-added vessels such as liquefied natural gas (LNG) carriers.
The won’s depreciation also contributed to its turnaround, according to Hanwha Ocean. The South Korean currency dropped 4% against the dollar on average in the first quarter from a year earlier, according to Bank of Korea data. The depreciation boosted the export values of the shipbuilders.
Hanwha Ocean expected earnings to improve further as the production of high-end LNG carriers is set to be reflected in the coming quarters. The shipyard is scheduled to build 22 LNG carriers this year and 24 in the next.
The company has secured $3.4 billion in orders so far this year to manufacture vessels such as 12 LNG carriers, two very large crude carriers (VLCCs), two ammonia carriers and one very large liquefied petroleum gas (LPG) carrier.