Hanwha Ocean, working to move past its Canadian setback, is seeking a turnaround through orders for floating production, storage, and offloading (FPSO) units and overseas naval vessels. Securing two FPSO units this year \u2014 each valued at roughly $3 billion (approximately \u20a94.47 trillion) \u2014 would instantly propel the company’s annual order intake beyond the $10 billion threshold. With the results of the preferred bidder selection for Thailand’s frigate program expected as early as the end of this month, attention is also focused on whether the company can build order momentum in its naval defense segment.<\/p>\n
According to industry sources on the 16th, the Namibia Venus FPSO project that Hanwha Ocean is pursuing is an oil field development initiative led by French energy major TotalEnergies. The project targets first oil production by 2030, with a final investment decision (FID) planned for the second half of this year. An FPSO is a large-scale offshore facility that drills crude oil from offshore fields, processes it to remove impurities, stores it, and offloads it onto shuttle tankers. Hanwha Ocean is targeting a total of two FPSO orders this year, including the Venus project.<\/p>\n
In the race for the Namibia FPSO, Hanwha Ocean is competing against Netherlands-based SBM Offshore. SBM Offshore has formed a consortium with Chinese shipyards, distributing hull and topside fabrication orders to enhance price competitiveness. In contrast, Hanwha Ocean’s strategy emphasizes the advantages of building the entire FPSO at a single shipyard, highlighting superior quality and optimized delivery schedules.<\/p>\n
Securing FPSO orders is critical for improving Hanwha Ocean’s offshore division performance. The company’s Energy Plant Business Division posted an operating loss of \u20a973.9 billion (approximately $49.8 million) in the first quarter, swinging to a loss from the previous quarter. Han Seung-han, an analyst at SK Securities, explained, “The offshore division, where quarterly losses are a concern, needs offshore plant orders including the Namibia Venus FPSO in the second half. If orders materialize, concerns about the offshore division’s performance from next year onward will also ease.”<\/p>\n
In the naval defense segment, the company is competing for multiple warship construction projects. The most imminent is the Royal Thai Navy’s next-generation frigate acquisition program, a project worth approximately \u20a9800 billion (approximately $538.7 million) to build one 4,000-ton frigate. If follow-on orders for three additional vessels are secured, the total program value could expand to around \u20a94 trillion (approximately $2.7 billion). The preferred bidder is expected to be selected as early as the end of this month, with Hanwha Ocean competing against its domestic naval rival, HD Hyundai Heavy Industries.<\/p>\n
Beyond Thailand, a series of overseas naval projects are in the pipeline \u2014 including 4 to 6 submarines and 5 frigates for Saudi Arabia, 2 submarines for the Philippines, and 4 submarines for Greece \u2014 suggesting the competition between the two sides will only intensify.<\/p>\n
Hanwha Ocean’s stock price has trended downward after the company was shortlisted but ultimately failed to secure the final contract for the Royal Canadian Navy’s Canadian Patrol Submarine Project (CPSP), which involves 12 submarines of the 3,000-ton class. The stock, which closed at \u20a9113,600 (approximately $76.50) on the 6th just before the CPSP results were announced, fell to an intraday low of \u20a974,000 (approximately $49.83) on the 14th, before closing at \u20a982,000 (approximately $55.22) on the 15th.<\/p>\n
The company’s commercial vessel order performance this year has also lagged behind its competitors. Hanwha Ocean has so far secured orders for 27 vessels worth approximately $4.61 billion (\u20a96.87 trillion). This compares with HD Korea Shipbuilding & Offshore Engineering’s $16.39 billion (\u20a924.42 trillion) and Samsung Heavy Industries’ $10 billion (\u20a914.9 trillion). While the two rivals have achieved 70% and 72% of their annual order targets respectively, Hanwha Ocean \u2014 which does not publicly disclose an annual target \u2014 has filled roughly 46% of its previous year’s order intake.<\/p>\n
However, considering that a single FPSO is valued at around $3 billion, securing both units this year would instantly lift the company’s order backlog to the $10 billion level. Hanwha Ocean maintains that achieving performance comparable to the previous year should be manageable.<\/p>\n
A shipbuilding industry official commented, “It is true that Hanwha Ocean’s order performance appears somewhat modest compared to this year’s shipbuilding market conditions,” but added, “There is room to interpret this as a strategic move to expand warship orders in line with the group’s portfolio, which positions defense as a future core pillar.”<\/p>\n
Meanwhile, DS Investment & Securities projected in a report on the same day that the global LNG carrier boom cycle will continue for at least five years. As of the second quarter of this year, global LNG projects totaled 174, a record high, and with replacement demand for aging vessels factored in, the analysis suggests average annual demand for 90 to 110 LNG carriers through 2032.<\/p>\n
DS Investment & Securities analyst Kim Dae-sung stated, “Considering global LNG projects and demolition replacement demand, the LNG carrier boom cycle will persist for at least five years.” The assessment reflects 53 projects currently under construction, 27 in the basic design phase, and 94 in the proposal stage, incorporating expected volumes from basic design phase projects where final investment decisions are anticipated in 2026-2027 based on long-term supply contract status.<\/p>\n
Replacement demand for aging vessels is also expected to support new orders. A total of 64 LNG carriers were scrapped this year, all steam turbine vessels aged 20 years or older. Currently, approximately 120 steam turbine LNG carriers globally have surpassed the 20-year age mark, suggesting significant potential for annual replacement demand of 10 to 20 vessels over the next five years.<\/p>\n
South Korea’s three major shipbuilders are already enjoying strong order flows. HD Hyundai Heavy Industries, Samsung Heavy Industries, and Hanwha Ocean collectively secured $15.26 billion in commercial vessel orders during the first half of this year. HD Hyundai Heavy Industries achieved 59% of its annual target and Samsung Heavy Industries 66% in the first half alone, raising the possibility that both will exceed their order targets again this year.<\/p>\n
In the second half, orders are expected to increase further, driven by U.S. LNG projects. Large-scale orders of around 20 vessels each are anticipated from Woodside, ExxonMobil, and Venture Global. Analysis suggests that price competition from Chinese shipyards may ease, given that 60-70% of China’s 2029 delivery slots are already filled, and Hudong-Zhonghua, which has LNG carrier construction experience, is understood to have secured roughly half of its 2030 slots.<\/p>\n
LNG carrier newbuilding prices for South Korean shipyards are forecast to rise from $250 million to $254 million per vessel in the first half to $256 million to $257 million in the second half. With the three major shipbuilders maintaining high hedge ratios, steadily rising vessel prices in Korean won terms are expected to translate into improved revenue and profitability going forward.<\/p>\n
Second-quarter earnings are also expected to show significant growth. DS Investment & Securities forecast Samsung Heavy Industries’ second-quarter operating profit at \u20a9375.3 billion (approximately $252.7 million), up 83.2% year-on-year. HD Hyundai Heavy Industries is estimated to post \u20a9977.5 billion (approximately $658.2 million), a 125.4% increase, while Hanwha Ocean is projected to record \u20a9554 billion (approximately $373.1 million), up 49.1%. The reflection of high-priced vessel deliveries in revenue and an expanding share of gas carriers are expected to drive profitability improvements.<\/p>\n
Analyst Kim rated Samsung Heavy Industries as the most undervalued among South Korea’s large shipbuilders, maintaining a ‘Buy’ investment opinion and a target price of \u20a942,000 (approximately $28.28). He also highlighted the potential for orders in high-margin vessel types such as floating LNG (FLNG) production facilities and floating data centers.<\/p>\n","protected":false},"excerpt":{"rendered":"Hanwha Ocean, working to move past its Canadian setback, is seeking a turnaround through orders for floating production,…\n","protected":false},"author":2,"featured_media":89581,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[345],"tags":[47107,27302,2255,355,354,373,717,1992,47104,256,47106,47105,39810],"class_list":["post-89580","post","type-post","status-publish","format-standard","has-post-thumbnail","category-hanwha-ocean","tag-canada-cpsp","tag-ds-investment-securities","tag-fpso","tag-hanwha","tag-hanwha-group","tag-hanwha-ocean","tag-hd-hyundai-heavy-industries","tag-lng-carrier","tag-namibia-venus","tag-samsung-heavy-industries","tag-sbm-offshore","tag-thailand-frigate","tag-totalenergies"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/89580","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=89580"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/89580\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/89581"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=89580"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=89580"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=89580"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}