Hanwha Engine signs 132.2 billion won ship engine supply deal with Samsung Heavy Industries

[Financial News] Hanwha Engine Co., Ltd. has secured additional medium- to long-term work by signing a contract with Samsung Heavy Industries to supply marine engines worth 132.2 billion won.
According to industry sources on the 16th, Hanwha Engine Co., Ltd. disclosed on the 15th that it had signed a contract to supply engines worth 132.25368 billion won for ships that Samsung Heavy Industries plans to build.
The contract value is equivalent to 9.6% of the company’s consolidated revenue of 1.3711 trillion won last year. The contract runs from the 15th of this month through November 15, 2028, for about two years and one month. Payment terms are 15% upfront and the remaining 85% upon delivery, meaning most of the revenue will be received when the engines are delivered.
Hanwha Engine Co., Ltd. supplies marine engines to major domestic shipbuilders, including Samsung Heavy Industries, as well as its affiliate Hanwha Ocean Co., Ltd. The contract will allow it to maintain a stable order base among customers outside its affiliates as well.
As domestic shipbuilders continue to win orders focused on high-value vessels such as liquefied natural gas (LNG) carriers, marine engine makers are also seeing their order bases expand.
Hanwha Engine Co., Ltd.’s order backlog stood at 597.89 billion won as of the end of June, up 44% from 414.27 billion won at the end of last year. Its operating profit for the first half of this year also rose 59% year on year to 89.3 billion won. Industry observers expect the expansion in shipbuilders’ production of high-value vessels to have a positive impact on engine makers’ ability to secure stable orders and improve profitability.
Other marine engine makers are also continuing to see orders and earnings improve, buoyed by the boom in the shipbuilding industry. HD Hyundai Marine Engine posted revenue of 261.6 billion won and operating profit of 63.9 billion won in the first half of this year. Its operating margin reached 24.4%. New orders in the first half totaled about 677.7 billion won, exceeding the 621 billion won it secured for all of last year.

[email protected] Jeong Won-il Reporter