Korean Shipbuilders Hit Record Profit Margins in Shipbuilding News 03/06/2026 HD Korea Shipbuilding & Offshore Engineering, the mid-tier holding company of HD Hyundai, recorded an operating profit margin of 16.7% in the first quarter (January–March) of this year. This marks the highest figure since its establishment in 2019, even surpassing levels seen during the industry’s boom period about two decades ago. The operating profit margin, calculated by dividing operating profit by sales, is a key indicator of a company’s profitability. The margin, which stood at just 1.32% in 2023, has risen sharply in recent years. Other shipbuilders are also setting new profitability records. Hanwha Ocean’s margin increased from 9.13% last year to 13.7% in the first quarter of this year. For mid-sized shipbuilder Daehan Shipbuilding, the first-quarter operating profit margin reached a remarkable 26.8%. The shipbuilding industry requires massive inputs of raw materials like steel and labor, with construction periods often exceeding three to four years. This makes it highly vulnerable to short-term spikes in material or labor costs. If the ship price is set low at the time of order, losses can occur when the vessel is delivered three to four years later. A margin exceeding the domestic manufacturing average of 5.1% (as of 2024) is considered a success, but the current situation—with multiple Korean shipbuilders achieving double-digit margins—is exceptional. The primary reason for the significant improvement in profitability is the rise in “profitable orders.” According to Clarksons Research and industry sources on May 1, global ship orders from 2021 to 2025 averaged 60.8 million CGT (compensated gross tonnage), surpassing the 59.9 million CGT average during the previous boom period of 2005–2009. CGT reflects not only vessel size but also construction complexity and workload across ship types. Although the number of vessels ordered decreased from 3,819 to 2,552 during this period,