The South Korean shipbuilder Hyundai Heavy Industries (HHI) has reported a net profit of KRW 682.3 billion (USD 596.6 million) for the full year of 2016, returning from a loss of KRW 1.36 trillion (USD 1.18 billion) seen in the full year 2015.
Operating profit for 2016 totaled 1.64 trillion won, up from a loss of 1.54 trillion won for 2015.
HHI also announced consolidated 4Q 2016 results. During the October-December period of 2016 HHI racked up 10.3427 trillion won in sales and 437.7 billion won in operating profits, posting quarterly profits for four straight quarters.
HHI attributed the profit to an increased volume of ships it won at profitable prices, continued efforts to cut costs and streamline shipbuilding processes, an improved oil refining margin, and increased sales of Hyundai Oil Bank, the company’s oil refinery subsidiary.
HHI Group’s three shipbuilding companies and Hyundai Oilbank respectively contributed about 710 billion won and about 800 billion won to the consolidated full year profits. The stabilization of manufacturing processes for offshore plant business and efforts to reduce material costs of construction equipment
and electro electric systems division also played a role in making the profit.
In 2016, HHI implemented a variety of revamping measures to sharpen its competitiveness including carrying out management improvement plan and reorganizing affiliated companies. The company also strengthened its financial soundness by lowering its consolidated liabilities-to-equity ratio to 175% from 220% by the end of 2016 with the sell-off of non-core assets.
An HHI official said, “The comprehensive management improvement efforts we made last year enabled us to make profits even with a dearth of new orders. Even if the market conditions are less likely to turn favorable this year along with shrinking work volumes, all of our employees will stand united to continue to make profits.”