Benefiting from the successive delivery of high value-added vessels and favorable exchange rates for export-oriented businesses, Hanwha Ocean’s operating profit for the first quarter of 2026 exceeded market expectations.
Recently, Hanwha Ocean released its first-quarter 2026 financial results. For the period from January 1 to March 31, 2026, the company generated operating revenue of 3.2099 trillion KRW (approximately US$2.185 billion), a year-on-year increase of 2.1%; achieved an operating profit of 441.1 billion KRW (approximately US$300 million), up 70.6% year-on-year; and posted a net profit of 500 billion KRW (approximately US$340 million), surging by 131.8%.
Although Hanwha Ocean’s revenue remained largely flat year-on-year, its operating profit and net profit saw significant growth, reflecting a substantial improvement in the company’s earnings structure. Furthermore, the operating profit reported by Hanwha Ocean for the period far exceeded the consensus forecast of the South Korean securities industry—375 billion KRW—representing a 45% increase compared to the previous year.
Hanwha Ocean stated that the operating revenue for the reporting period was primarily derived from its merchant vessel business, accounting for approximately 87% of the total. In 2026, the revenue contribution from low-priced new vessel orders—originally secured by the shipbuilder in 2022—is expected to decline; conversely, high value-added orders secured since 2024 are gradually beginning to be reflected in operating revenue, thereby driving a significant improvement in profitability.
By business segment, in the first quarter, Hanwha Ocean’s merchant shipping business generated revenue of 2.7945 trillion KRW (approximately US$1.902 billion), a 9% year-over-year increase; operating profit reached 502.1 billion KRW (approximately US$342 million), surging 115%; and the operating profit margin stood at 18%. Analysts attribute this improvement in Hanwha Ocean’s profitability to the expansion of orders at high ship prices, which has been driven by the company’s continued focus on a high-value-added fleet centered on LNG carriers.
The Specialized Vessels business reported operating revenue of 318.3 billion KRW (approximately US$217 million) in the first quarter, a 5% increase year-over-year but a 14% decrease quarter-over-quarter; the segment posted an operating loss of 20.8 billion KRW (approximately US$14 million), marking a shift from profit to loss compared to the same period last year. Analysts attribute this primarily to factors such as delays in recognizing revenue from additional orders due to design changes, increased operating and administrative expenses incurred to expand overseas orders, and the burden of fixed costs associated with the early expansion of production capacity.
The offshore energy business continued to struggle, with revenue for the reporting period totaling 178.9 billion KRW—a 53% year-over-year decline—due to the completion of existing projects and delays in the commencement of new ones. The operating loss reached 73.9 billion KRW, marking a widening of the loss. Hanwha Ocean explained that delays in obtaining project approvals and certifications led to postponed project starts, further dragging down performance.
In terms of new vessel orders, Hanwha Ocean secured orders worth US$2.45 billion in the first quarter, including high-value-added vessel types such as four liquefied natural gas (LNG) carriers and seven Very Large Crude Carriers (VLCCs).
As of May 4, Hanwha Ocean has secured new shipbuilding orders for 18 vessels this year, valued at approximately US$3.2 billion. Broken down by vessel type, these orders include 10 VLCCs, 4 LNG carriers, 3 VLACs, and 1 wind turbine installation vessel.
In addition, exchange rate effects also contributed to Hanwha Marine’s profit growth, as shipbuilding contracts are typically denominated in U.S. dollars. The weakening of the South Korean won in the first quarter, with the USD/KRW exchange rate hovering around 1,450 won per dollar, bolstered the company’s profitability. South Korean securities analysts noted that, compared to the previous quarter, exchange rate factors contributed to an increase of approximately 44 billion won in operating revenue and an increase of approximately 15 billion won in operating profit.
Hanwha Ocean remains relatively optimistic about its future performance outlook; as commercial vessel projects with high ship prices are recognized as revenue, the trend of improving profitability is expected to continue.