Hanwha Ocean (042660) is accelerating its push into global naval vessel markets across South America, the Middle East, Southeast Asia, and Europe, putting the disappointment of its failed Canadian submarine bid behind it. Capitalizing on South Korean President Lee Jae-myung’s state visit to Chile, seven senior executives including President Chung In-sub joined the economic delegation to go all-out for the country’s naval modernization contracts. Simultaneously, the company is pursuing major warship procurement opportunities in Thailand, Saudi Arabia, and Greece.
During its second-quarter 2026 earnings conference call on the 27th, Hanwha Ocean emphasized that additional opportunities exist in the global naval vessel market despite the unsuccessful Canadian Patrol Submarine Project (CPSP) bid. A company representative stated, “Reaching the final round competing against Germany, which builds world-class submarines, with our independently developed submarine demonstrates that our technology is globally competitive.” The representative added, “Building on the capabilities and know-how gained from this project, we are knocking on new markets such as Greece, Thailand, and South America, and will execute future projects without disruption.”
Regarding the utilization of warship production capacity following the CPSP setback, the company explained, “Even without Canada, we have ongoing discussions in Africa, Europe, and Asia. Submarine export opportunities will continue to arise, if not immediately.” The representative continued, “In the surface vessel segment, if opportunities emerge in the United States, we will leverage Hanwha Ocean’s full production capacity. Since we have also secured the Korean next-generation destroyer (KDDX) program, we plan to maximize the utilization of our entire naval vessel capacity.”
Chile, Thailand, Saudi Arabia, Greece: Global Order Competition Intensifies
Chile is currently one of the markets where Hanwha Ocean is investing the most effort. Aligned with President Lee Jae-myung’s state visit, seven senior executives including President Chung In-sub and Vice President Park Sung-woo accompanied the economic delegation to formally enter the competition for the country’s naval force modernization projects. President Chung is scheduled to attend the South Korea-Chile Business Roundtable in Santiago on the 30th to meet with local companies and discuss detailed cooperation plans.
In an interview with Latin American defense media outlet Infodefensa, a Hanwha Ocean representative stated, “We are committed to participating as a long-term strategic partner in Chile’s future submarine and frigate programs. Our goal is to contribute beyond mere vessel construction, encompassing joint design, technology transfer, shipyard modernization, workforce development, and supply chain cooperation.”
Chile is pursuing the acquisition of new submarines to replace two Type 209 1,400-ton submarines commissioned in 1984 and operated for over 40 years, while separately considering the construction of multi-purpose frigates. Both programs emphasize maintenance, technology transfer, and construction within Chile’s state-owned shipyards, making localization a key variable in the bidding process. According to local media estimates, the acquisition of two submarines could cost up to $900 million (approximately 1.3 trillion won).
Hanwha Ocean showcased the Chile-customized Ocean 2000 submarine and Ocean 4500 frigate at the FIDAE 2026 defense exhibition in Santiago this April, and also signed a Memorandum of Understanding (MOU) with the Austral University of Chile to support talent development. Furthermore, 26 Chilean senators from both ruling and opposition parties recently submitted a bipartisan resolution urging the establishment of a plan to prevent naval capability gaps, including the replacement of aging submarines. This is seen as creating a favorable environment for South Korean companies, coinciding with President Lee’s visit. However, cautious views suggest that a firm order may be difficult within one to two years given Chile’s fiscal conditions.
In the Southeast Asian market, the Royal Thai Navy’s next-generation frigate program is a key target. This project, valued at approximately 800 billion won (approximately $544.4 million), involves selecting a builder for one 4,000-ton frigate. If three follow-on vessels are subsequently ordered, the total program cost is estimated to reach up to 4 trillion won (approximately $2.7 billion). Hanwha Ocean holds an advantageous position, having successfully delivered a 3,700-ton frigate to Thailand during its previous incarnation as Daewoo Shipbuilding & Marine Engineering.
Opportunities are also opening up in the Middle East and Europe. Saudi Arabia is reportedly considering the acquisition of four to six submarines (approximately 5 trillion won, or approximately $3.4 billion) and five 6,000-ton frigates (approximately 3 trillion won) to strengthen its naval forces. Hanwha Ocean is said to be reviewing participation in the submarine program. In Greece, the procurement of at least four submarines is currently being pursued. Hanwha Ocean signed a strategic cooperation agreement with local shipbuilding and defense company ONEX Group in March, agreeing to participate as a partner in submarine projects ordered by the Hellenic Coast Guard and Navy.
Q2 Operating Profit Surges 98%: An Earnings Surprise
Hanwha Ocean’s consolidated second-quarter 2026 results significantly exceeded market expectations. Revenue rose 65.2% year-on-year to 5.44 trillion won (approximately $3.7 billion), while operating profit surged 98% to 736.1 billion won (approximately $500.9 million) on a preliminary basis. Net profit skyrocketed 366.7% to 692.6 billion won (approximately $471.3 million). This represents the highest performance ever, including the period before its integration into Hanwha Group when it was known as Daewoo Shipbuilding & Marine Engineering. The sharp revenue increase was significantly influenced by the one-time recognition of approximately 1.5 trillion won (approximately $1.0 billion) in offshore project revenue.
The company attributed the earnings growth to improved operational efficiency driven by production stabilization, revenue recognition centered on LNG carriers, improved vessel prices and exchange rates, and reduced material costs. The naval vessel division also significantly narrowed its losses through cost reduction and profitability improvement activities, despite the burden of selling, general, and administrative expenses and fixed costs. A Hanwha Ocean representative stated, “Since the launch of Hanwha Ocean, we have continuously generated cost innovation results such as improved work efficiency and expense reduction. This trend of strengthening profitability and mid-to-long-term earnings improvement will continue.”
The company noted that it is currently conducting slot sales through the first half of 2030 and expects order performance to improve further in the second half of this year. If the expansion of orders centered on high-margin vessel types is coupled with visible results from naval vessel orders in Chile, Thailand, Saudi Arabia, and Greece, the earnings momentum is expected to strengthen further.