Korean shipbuilders post strong Q2 earnings amid rising sales, operating profits
Published: 29 Jul. 2025, 18:34
![A large crane stands at Hanwha Ocean’s headquarters in Geoje, South Gyeongsang, on July 28, four days ahead of the deadline for Korea-U.S. tariff negotiations. [YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/07/29/f382c004-d24e-42de-8c9c-d64b30d71a79.jpg)
A large crane stands at Hanwha Ocean’s headquarters in Geoje, South Gyeongsang, on July 28, four days ahead of the deadline for Korea-U.S. tariff negotiations. [YONHAP]
Korea’s major shipbuilders are reporting strong second-quarter earnings, with rising sales and operating profits adding momentum to an industry seen as a key leverage point in ongoing trade negotiations with the United States.
Hanwha Ocean announced Tuesday that it posted 3.29 trillion won ($2.3 billion) in revenue and 371.7 billion won in operating profit for the April-June period. Revenue rose 30 percent compared to the same quarter last year, with the company also returning to profit after recording a loss in the same quarter last year.
Market analysts had forecast 18 percent year-on-year revenue growth and around 260 billion won in operating profit, but the company exceeded expectations.
Other major Korean shipbuilders posted similarly strong performances.
Samsung Heavy Industries reported on Thursday that it earned 2.68 trillion won in revenue and 204.8 billion won in operating profit in the second quarter.
Sales rose 6 percent while operating profit surged 56.7 percent compared to the same period last year.
"This marks the first time since 2014 that Samsung Heavy’s quarterly operating profit exceeded 200 billion won," a company official said.
![A large crane stands at Hanwha Ocean’s headquarters in Geoje, South Gyeongsang, on July 28, four days ahead of the deadline for Korea-U.S. tariff negotiations. [YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/07/29/c3051f82-2878-4ec5-9dc8-313cf5292e36.jpg)
A large crane stands at Hanwha Ocean’s headquarters in Geoje, South Gyeongsang, on July 28, four days ahead of the deadline for Korea-U.S. tariff negotiations. [YONHAP]
HD Korea Shipbuilding & Offshore Engineering is also scheduled to release its results on Thursday, with analysts expecting significant growth in both revenue and profit compared to last year.
Analysts attribute the solid earnings to a shift in revenue composition toward high-margin vessel types.
Liquefied natural gas (LNG) carriers, which are more profitable than container ships, now account for a larger share of total sales. In shipbuilding, a time lag of two to three years typically separates order placement and vessel delivery.
Companies receive partial payment upon order and collect the remainder after delivery.
"We have entered full production on vessels ordered in 2022, and expect even higher revenue from ships ordered in 2023 and 2024, when contract prices increased," Hanwha Ocean said.
The company added that LNG carriers made up roughly 60 percent of its second-quarter revenue.
During a conference call following the earnings release, analysts raised questions about Hanwha Ocean’s role in U.S.-Korea cooperation on shipbuilding.
The United States is seeking to bolster its naval power and revive its domestic shipbuilding industry by leveraging Korean technology.
![A national security-purpose vessel is under construction at Dock 4 of Hanwha Philly Shipyard in Philadelphia, Pennsylvania on July 16. [YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/07/29/10c3db69-0935-4703-a012-254aab38e282.jpg)
A national security-purpose vessel is under construction at Dock 4 of Hanwha Philly Shipyard in Philadelphia, Pennsylvania on July 16. [YONHAP]
Hanwha Group Vice Chairman Kim Dong-kwan flew to the United States on Monday to join Korea’s trade delegation.
When asked whether Kim was traveling under government direction or acting independently in relation to the Make American Shipbuilding Great Again, Hanwha Ocean said that he company is "not in a position to confirm details regarding Korea-U.S. shipbuilding cooperation and will communicate with the market when specifics become available.”
“In addition to the Charles Drew, which we secured earlier this month, we are submitting proposals for other ships," the company said about U.S. Navy ship maintenance, repair and overhaul (MRO) contracts. "While meeting this year’s goal of six contracts may be difficult, we expect to deliver different results within the year.”
Despite the current strength of the industry, some analysts have expressed concern about future orders.
While Korean shipbuilders have enough contracts to sustain operations for the next three years, the global volume of new orders is declining, and economic headwinds may weigh on demand in the second half of the year.
A report published by the Export-Import Bank of Korea on Monday showed that global new ship orders totaled 19.39 million compensated gross tons (CGT) in the first half of 2025, a 54.5 percent decline from the same period last year. Korea’s own order volume fell 33.5 percent year-on-year to 4.87 million CGT.
But Korea’s market share rose with support from recent U.S. trade measures.
The United States Trade Representative recently imposed port fees on Chinese shipping companies and Chinese-built vessels, prompting a shift in orders from China to Korea, particularly for container ships. Korea’s global market share rose to 25.1 percent, up from 15 percent last year.
"The recovery in Korea’s market share is a positive sign, but it is merely a by-product of U.S.-China tensions," said Yang Jong-seo, a researcher at the Export-Import Bank of Korea. "Rather than placing long-term expectations on this, Korea must urgently work to widen the quality gap with China and strengthen its own competitiveness.”
Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY LEE SU-JEONG [[email protected]]
with the Korea JoongAng Daily
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