Daehan Shipbuilding’s Q3 operating profit rises 24%; confidence in selective orders also underpins shareholder returns

[Financial News] Daehan Shipbuilding’s third-quarter operating profit rose 24% year on year, reflecting the company’s success in securing profitability through selective order-taking. It also said it would return at least 30% of net income to shareholders.
Daehan Shipbuilding announced preliminary third-quarter results on the 11th, reporting revenue of 327.7 billion won and operating profit of 82.7 billion won. Compared with the same period last year, revenue rose 19.6% and operating profit surged 24.4%. Operating profit grew faster than revenue, indicating a clear improvement in profitability.
Daehan Shipbuilding has maintained an operating margin in the 20% range for eight consecutive quarters, including this third quarter. This year, its operating margin was 26.8% in the first quarter, 26.9% in the second and 25.2% in the third. Its cumulative operating margin stands at 26.3%, up 3.7 percentage points from a year earlier.
Daehan Shipbuilding has secured profitability by focusing on high-margin vessel types, selectively taking orders and building them repeatedly. Its main vessel type is the Suezmax-class crude oil tanker, designed to pass through the Suez Canal. As of September, 30 of the 35 vessels in its order book were Suezmax-class crude oil tankers.
With work secured through 2029, Daehan Shipbuilding plans to increase earnings by selectively taking orders for high-margin vessel types. Given its somewhat heavy reliance on Suezmax-class crude oil tankers, it is expected to gradually increase orders for shuttle tankers and container ships that it is building.
Confident in its improved profitability, the company is also moving to return value to shareholders. Daehan Shipbuilding pledged to return at least 30% of its net income to shareholders each year for three years, starting next year. The calculation will be based on net income from this year through the year after next. It plans to combine cash dividends with the cancellation of treasury shares.

[email protected] Kim Yun-ho Reporter