Samsung Heavy Industries recorded a profit last year, leading the Big Three shipbuilders, including HD Hyundai Heavy Industries and Hanwha Ocean, to all report profits. The South Korean shipbuilding industry is expected to benefit from the expansion of maintenance, repair, and overhaul (MRO) services and the liquefied natural gas (LNG) market as the administration of former U.S. President Donald Trump began.
Samsung Heavy Industries reported sales of 9.9031 trillion won and an operating profit of 502.7 billion won as of the 5th. This marks increases of 24% and 116%, respectively, compared to the previous year. HD Hyundai Heavy Industries saw its operating profit rise 295% year-over-year to 705.2 billion won, while sales increased by 21% to 14.4865 trillion won. Hanwha Ocean recorded an operating profit of 237.9 billion won, turning from a loss of 196.5 billion won the previous year, with sales climbing 46% to 1.776 trillion won. This is the first time Hanwha Ocean has achieved an annual profit in four years since 2020.
The success of domestic shipbuilders in improving their performance stems from a significant number of orders for high-value-added ships such as LNG carriers. According to the shipbuilding industry, South Korea has secured about 70% of the global orders for LNG carriers. HD Korea Shipbuilding & Offshore Engineering has received orders for 91 out of the 173 LNG carriers ordered worldwide in the past three years, which amounts to 30%. The outstanding order backlog for Samsung Heavy Industries stands at 84 vessels, while Hanwha Ocean has a backlog of 77 vessels.
If the Trump administration increases investments related to LNG, it is expected to benefit the South Korean shipbuilding industry. According to maritime research firm Clarkson Research, the U.S. LNG projects are projected to require 234 LNG ships by 2030. The industry anticipates that these orders will be placed by 2027, especially following the recent decision by the U.S. Department of Defense to blacklist Chinese companies, which has fostered expectations for domestic companies to benefit.
As the growth of data centers and the artificial intelligence (AI) industry makes large-scale power supply increasingly vital, there are projections for expanded plant projects for LNG production, storage, and unloading. Yang Jong-seok, chief researcher at the Korea Export-Import Bank, noted that “the fossil fuel priority policy of the new U.S. administration is expected to lead to orders for LNG ships and large oil tankers from the U.S.,” adding that “the shipbuilding and port facilities law (SHIPS for America Act) is also expected to provide opportunities for the domestic shipbuilding industry.”
Source: CHOSUNBIZ
