HJ Shipbuilding & Construction (HJSC) is on track to improve its performance on the back of steady orders. The company is expected to continue its order intake as it focuses on securing additional orders by the end of the year.
HJSC said on Nov. 20 that it expects its operating results to improve in the second half of the year as labor and material costs stabilize and provisions are returned to operating results.
The company explained that a big reason for the improvement in operating results is that the construction and shipbuilding divisions, which comprise its two main business segments, have a strong order book of 7.4 trillion won, which is equivalent to about four years' worth of construction work.
The construction division secured KRW 5 trillion worth of projects mainly for public works in Korea, including the expansion of Incheon International Airport Terminal 2, the construction of Gwanggyo and Homae-sil on the new Bundang Line, the construction of GTX-A, the construction of a campus for the Korea Institute of Energy Technology, the construction of the 500kV New Gapyeong Transformer, the construction of the Gangwon Electricity Supply Facility Power District, and the construction of Boryeong New Combined Cycle Power Plant No. 1.
The company's performance in the maintenance business is also noteworthy due to the strengthening of the Korean housing market. Since the beginning of this year alone, HJSC has received orders worth over 600 billion won for the redevelopment of Samseong-dong in Daejeon, Beomae-dong in Daegu, Happy Apartment in Daejam-dong, Pohang, the redevelopment of Yeonsan-dong in Busan, and the redevelopment of Yeokgok-dong in Bucheon, creating a "HAEMORO" surge, and HJSC's brand status is rising rapidly.
The shipbuilding division has also secured work worth 2.4 trillion won, including 10 eco-friendly container ships of 5,500 to 9,000 TEUs and various special ships for defense, despite the pressure of price increases. In particular, its order backlog was around 1.4 trillion won at the end of 2021, but it increased significantly to 2.2 trillion won last year and has continued to rise slightly this year.
In the specialty ship sector, where it is recognized as a competitive advantage, it has also succeeded in winning orders for high-speed landing craft, new high-speed boats, Dokdo ship performance improvement projects, Joint Logistics Over-the-Shore (JLOTS), and 3,000-ton patrol boats for the Coast Guard. This is due to the company's focus on normalizing its shipbuilding operations after the change in its majority shareholder in August 2021.
HJSC is determined to reap the benefits of its success in various order battles ranging from various special purpose vessels, including the Navy's high-speed boats, which were concentrated at the end of the year, to eco-friendly container ships and gas carriers. Recently, the company succeeded in developing an 8,500 TEU carbon capture and storage container ship, preparing for market demand in the upcoming carbon cap era.
Meanwhile, HJSC secured about KRW 200 billion in cash this year by selling the site of Incheon North Port in South Korea, which is considered a valuable asset.
