HD Hyundai Heavy Industries third-quarter operating profit rises 59.2 percent on shipbuilding demand

HD Hyundai Heavy Industries said Wednesday its third-quarter operating profit rose 59.2 percent from a year earlier to 892 billion won ($665 million), as the shipbuilder worked through a backlog of long-term vessel contracts.

Revenue for the quarter reached 5.73 trillion won ($4.27 billion), up 29.8 percent from a year earlier, while net income came to 348 billion won ($260 million).

Both headline measures were weaker than in the second quarter: revenue fell 9.2 percent from the preceding three months and operating profit declined 13.9 percent.

The company books revenue on long-term projects that run two to three years from order to delivery, so quarterly totals move with the construction schedule rather than with the flow of new orders.

Shipbuilding accounts for 77.9 percent of revenue, with engine machinery at 14.9 percent and offshore plants at 6.8 percent.

HD Hyundai Heavy Industries builds large vessel engines under licenses from Everllence and WinGD, and makes medium-sized generator engines under its own HiMSEN brand, a line it says holds the world's largest share at about 35 percent.

For the first nine months of the year, revenue totaled 17.9 trillion won ($13.4 billion) and operating profit 2.83 trillion won ($2.11 billion), up 44.9 percent and 93 percent respectively from the same period a year earlier.

The company had a market capitalisation of 30 trillion won ($22.4 billion) as of Nov. 3, ranking 21st on the main Kospi market.