Hanwha Ocean Continues Normalization with 1st Contract Following Naval Ship Deal

Hanwha Ocean is accelerating its management normalization, succeeding in its first contract since its establishment following its selection as the primary negotiator for a special naval ship.

According to industry sources on Aug. 2, Hanwha Ocean signed its first shipbuilding contract with an Asian client since its establishment. It’s been about two and a half months since the name change was approved at a board meeting on May 23.

The ship contracted for this time is an Liquefied Natural Gas (LNG) carrier, amounting to 332.2 billion won. It will be built at the Geoje Business Center in South Gyeongsang Province and is expected to be delivered in the first half of 2027.

Daewoo Shipbuilding & Marine Engineering, before Hanwha Ocean was launched, was unable to actively bid on ship orders due to merger issues, and thus recorded poor order performance in the first half of this year. It had only secured 15.2% of its order target at the time of Daewoo Shipbuilding & Marine Engineering (US$698,000), but with this LNG carrier order it has reached 21% of its annual target.

However, Hanwha Ocean has a policy to not attach great significance to the size of the order itself, refraining from low-cost order competitions since its establishment. There is already nearly 40 trillion won in remaining orders, so it isn’t in a rush to get more.

Furthermore, there are orders for Qatar’s 2nd LNG Ship Project remaining in the second half of the year, so the order outlook for the entire shipbuilding industry, including Hanwha Ocean, is bright. Last year, the three domestic shipyards won 54 out of the first 65 ships.

Since the launch of Hanwha Ocean, there have also been achievements in the field of special ships. Last month it was selected as the primary negotiator in the bid for the 5th and 6th ships of the Ulsan-class FFX Batch III of the next-generation navy frigate, beating out competitor HD Hyundai Heavy Industries.

In addition to speeding up management normalization through bidding, it is also making efforts to attract talent, including wage increases to bring treatment to the industry norm.

The industry expects Hanwha Ocean, which has settled into a normal track just a short time after its official launch, to turn to profitability in the second half of the year. According to financial information company FnGuide, Hanwha Ocean is expected to improve its operating loss (168 billion won) compared to the first quarter (628 billion won) and it is expected to achieve an operating profit of over 10 billion won in the third quarter.