Secures Another Major LNG Carrier Order! Shipbuilding Giant Kicks Off Fourth Quarter with Strong Order Intake

2025-10-09 08:29

On October 1, South Korea's Hanwha Ocean announced it had signed a contract with a North American shipowner to build one large LNG carrier. The contract is valued at 353.4 billion won (approximately $251 million or 1.787 billion yuan), with delivery scheduled before May 2028. This marks the company's first new ship order secured in the fourth quarter.

For reference, Clarkson data indicates that the current price for a 174,000-cubic-meter large LNG carrier stands at $250 million, representing a 4.58% decrease from $262 million during the same period last year.

To date, Hanwha Ocean has secured 32 new ship orders worth $6.32 billion (approximately RMB 45 billion) this year. This represents 179% of the company's 2023 order intake of $3.53 billion and 69% of its 2024 order intake of $8.11 billion. These 32 new orders comprise 6 LNG carriers, 13 container ships, 12 very large crude carriers (VLCCs), and 1 polar research icebreaker.

Amid the global shipping market's “supercycle,” Hanwha Ocean has steadfastly pursued a profitability-enhancing strategy focused on high-value-added vessels this year. Through selective order acceptance, the company is rapidly returning to normal operations.

In 2024, Hanwha Ocean achieved operating revenue of KRW 10.776 trillion (approximately USD 7.94 billion or CNY 56.5 billion at the annual average exchange rate), marking a 45.5% year-on-year increase. The company recorded an operating profit of KRW 237.9 billion (approximately USD 175 million or CNY 1.25 billion), turning a profit compared to the previous year's loss. This marks Hanwha Ocean's first annual profitability since 2021. Nevertheless, its economic performance remains the lowest among South Korea's top three shipbuilders, with operating profit significantly lower than HD Korea Shipbuilding & Offshore Engineering's KRW 1.4341 trillion (approximately USD 1.057 billion / CNY 7.52 billion) and Samsung Heavy Industries' KRW 502.7 billion (approximately USD 370 million / CNY 2.636 billion).

To address this, Hanwha Ocean announced earlier this year that it will pursue a “super gap” strategy by mass-producing high-value-added vessels and strengthening technological innovation leadership. This aims to build upon its 2024 turnaround into profitability and achieve further stable growth in 2025. In the merchant ship sector, the company will maintain a selective order-taking strategy, focusing primarily on high-value-added vessel types such as LNG carriers and container ships.

In the first half of this year, Hanwha Ocean recorded cumulative revenue of KRW 643.72 billion (approximately USD 4.63 billion / CNY 33.3 billion), a 33.56% year-on-year increase. Operating profit reached KRW 63.03 billion (approximately USD 453 million / CNY 3.26 billion), surging 1,456% year-on-year. This demonstrates the significant success of Hanwha Ocean's profit-centric business strategy, with the enhanced production focus on LNG carriers emerging as a key driver for profit improvement and overall performance growth.

A Hanwha Ocean official stated: "The company will steadfastly execute its selective order-taking strategy prioritizing profitability, ensuring the order backlog remains at a level equivalent to over three years of work by year-end. Moving forward, we will continuously enhance our competitiveness in eco-friendly ship technologies and deeply explore the U.S. MRO market to build a solid foundation for long-term corporate growth."

On May 13, Daol Investment & Securities released an analysis report indicating that ultra-high-value orders will account for 82% of Hanwha Ocean's order book by the fourth quarter of this year (based on order value), meaning four out of every five new ship orders fall into the ultra-high-value category. Low-margin loss-making orders (gross profit margin of 1%-4%), which have long constrained Hanwha Ocean's performance improvement, are expected to be cleared in the third and fourth quarters of this year. Korea's DS Investment & Securities predicts that Hanwha Ocean's commercial ship business profit will exceed KRW 300 billion (approximately USD 215 million, CNY 1.55 billion) in the fourth quarter of this year.

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