The first-quarter performance of South Korea’s ‘Big 3’ shipbuilders—HD Hyundai Heavy Industries, Hanwha Ocean, and Samsung Heavy Industries—is projected to improve significantly this year. A selective ordering strategy centered on high-value-added ship types is yielding results, and profitability is recovering rapidly amid a continued rise in newbuilding prices.

According to a consensus forecast (average of securities firms’ projections) from financial information provider FnGuide on April 6, the combined first-quarter revenue of the ‘Big 3’ shipbuilders (HD Korea Shipbuilding & Offshore Engineering, Hanwha Ocean, and Samsung Heavy Industries) is estimated at 14.0996 trillion won, with operating profit at 1.9221 trillion won. These figures represent year-on-year increases of 13.62% and 54.9%, respectively.

HD Korea Shipbuilding & Offshore Engineering is forecast to record revenue of 7.7866 trillion won and operating profit of 1.1902 trillion won, up 14.99% and 38.53%, respectively. Hanwha Ocean is expected to see revenue of 3.3020 trillion won and operating profit of 383.3 billion won, marking growth of 5.06% and 48.22%. Samsung Heavy Industries is also projected to experience a surge, with revenue of 3.0110 trillion won and operating profit of 348.6 billion won, increasing by 20.71% and 183.24%, respectively.

This improved performance is analyzed as the result of a qualitative shift in the order structure. The shipbuilders have moved away from past low-price orders and have restructured their portfolios to focus on high-value-added ship types such as Liquefied Natural Gas (LNG) carriers, Very Large Crude Carriers (VLCCs), and container ships. In particular, LNG carriers are regarded as a representative ship type that secures both high technological capabilities and profitability.

First-quarter order intake this year was also favorable. HD Korea Shipbuilding & Offshore Engineering secured $5.94 billion in orders, achieving over $253.1 billion in orders, and Hanwha Ocean also maintained a stable order flow, recording $2.43 billion.

By ship type, high-value vessels such as LNG carriers, LPG/ammonia carriers, VLCCs, and container ships were central to the orders. This highlights that the strategic shift toward profitability, rather than simply expanding volume, is now in full swing.

The structure of high-priced orders is also underpinning the performance improvement. As the backlog of past low-priced orders is gradually cleared, shipbuilders are filling their docks with high-profitability ship types, and the resulting effect on profit margin improvement is beginning to be fully reflected.

Industry indicators are also positive. The Clarkson Newbuilding Price Index stands at 182.08, remaining above the 180 mark that signifies a boom in the shipbuilding industry. Amid global eco-friendly regulations and the energy transition trend, orders for LNG-related projects are expected to continue, and medium- to long-term demand is forecast to remain solid.

The market anticipates that this trend will continue throughout the year. New orders for South Korean shipbuilders in 2026 are projected to reach approximately $38.8 billion, a 10% increase from the previous year, with LNG carriers and tankers identified as the key ship types driving these orders. In particular, with the possibility raised that South Korean shipbuilders could win the majority of the 77 global LNG carrier orders, their market dominance is expected to strengthen further.

The already-secured order backlog of over three years and the shortage of delivery slots for post-2029 are also factors supporting price increases. As competition among shipowners to secure construction slots intensifies, a further rise in newbuilding prices is anticipated, along with a strengthening of the shipbuilders’ pricing power.

Source:Business Korea