HSD Engine's order volume exceeds $162.1 million in one month

Growth in shipbuilding orders has greatly boosted the sales of manufacturers of related equipment such as ship engines.

South Korea's HSD Engine, whose main clients include Daewoo Shipbuilding & Marine Engineering Co. (DSME) and Samsung Heavy Industries, has won orders worth over $162.1 million in a one month-period.

The Financial Supervisory Service on Tuesday said HSD Engine this year has signed three contracts to supply marine engines -- two with Samsung Heavy Industries and one with China Merchants Heavy Industry (Jiangsu) -- and earlier concluded an engine supply deal with Samsung Heavy Industries on Dec. 21 last year. HSD Engine's cumulative order volume amount over the past 30 days was 221 billion won, or 37% of its annual sales in 2021 of 599 billion won on a consolidated basis.

Launched as a mid-size company in 1999 through the spinoffs and integration of the engine divisions of Doosan Heavy Industries & Construction and Samsung Heavy Industries, HSD Engine owns the second-largest share of the global ship engine market. It supplies more than 90% of the low-speed engines of Samsung Heavy Industries and DSME.

The company earned operating profit of 500 million won in last year's third quarter to turn a profit for the first time since the fourth quarter of 2020. The stellar results were thanks to stabilized prices of raw materials and a 59% surge in new orders from the previous year, which reduced the burden of fixed costs.

HSD Engine is also seeing a bright horizon, with an order backlog of 2.3 trillion won as of last year's third quarter that will ensure over two years of operations. Dual fuel engines with high unit prices and profitability accounted for 81% of sales.

Write to Seo-Woo Jang at suwu@hankyung.com