HJ Shipbuilding & Construction (097230.KS) reported first-quarter operating profit of 24.6 billion won, up 347% from a year earlier, the company said in a regulatory filing Friday. The growth came as construction of high-value-added vessels, including eco-friendly container ships, was fully reflected in earnings in its shipbuilding division, alongside an improved cost structure in its construction division.
The company recorded consolidated first-quarter revenue of 541.4 billion won, it said. This marks a 32% increase from 410 billion won in the first quarter of last year. Net profit surged 355% over the year, rising to 25.5 billion won in the first quarter from 5.6 billion won a year earlier.
By business segment, shipbuilding division revenue rose 70% to 268.6 billion won in the first quarter. This represents dramatic growth compared with the construction division's revenue of 269.3 billion won, up 8.6%. Shipbuilding revenue, whose share of total revenue had fallen to about 18% in 2022, has recovered to about half of total revenue as of last year.
In terms of operating profit, the company attributed its return to the black to the shipbuilding division's eco-friendly vessel development, selective orders focused on cost-competitive vessel types, an order strategy centered on core businesses such as high-speed boats, and enhanced cost management. The construction division also maintained its profitable trend, overcoming construction cost burdens from a slowdown in domestic and overseas construction markets and rising raw material and labor costs by focusing on cost ratio management.
HJ Shipbuilding plans to continue profitable management this year through profitability-focused "qualitative growth." Its goal is to establish a virtuous cycle in which quality work leads to improved profitability. This includes four new high-speed boats for the Navy and a multipurpose chemical response vessel for the Coast Guard ordered late last year, a U.S. Navy maintenance, repair and overhaul (MRO) project, four 10,100-TEU container ships ordered early this year, and domestic and overseas public works and various maintenance projects.
"Operating profit increased significantly from a year earlier as the share of revenue from high-profit projects expanded, centered on eco-friendly and high-value-added vessels," an HJ Shipbuilding official said. "As we have secured a stable order backlog of more than three years in both business divisions, we will focus on continuous structural improvement, cost structure innovation and enhancing corporate value."
