South Korea’s Hyundai Heavy Industries Group is on solid recovery path as its faithful compliance with self-prescribed restructuring program coupled with revived overseas demand improved both its bottom line and balance sheet.

The country’s top shipbuilding conglomerate that accumulated losses of near 5 trillion won ($4.4 billion) in 2014 and 2015 turned out a profit for the last six consecutive quarters. Its balance sheet showed more dramatic turnaround as it shed non-core assets as planned.

The preliminary earnings released on Tuesday showed the company’s operating profit down 7.2 percent on quarter and 13.7 percent on year at 151.7 billion won, while sales fell 3.7 percent on quarter and 23.8 percent on year to 4.63 trillion won on consolidated basis as it has become separate from three other non-shipbuilding entities through demerger.

It is expected to outperform its fund-raising plan for this year, expecting to raise over 3.5 trillion won once it sells off stake in HI Investment & Securities Co. in addition to its sales of interests in Hotel Hyundai earlier this year.

Through the stake sales and deleveraging efforts, its debt-to-asset ratio was brought down to 94 percent by the end of June from 134 percent six months ago.

At 1:10 p.m. on Thursday, shares of Hyundai Heavy Industries were up 0.6 percent at 78,500 won.

The shipbuilder has been recovering at faster pace than other shipyard majors. The three dockyards under the group - Hyundai Heavy Industries Co., Hyundai Samho Heavy Industries Co., and Hyundai Mipo Dockyard Co. - won a combined 81 orders valued at $4.5 billion in the first half of this year, outdoing its record of 81 shipbuilding orders worth $5.9 billion in full 2016.

Industry watchers predict new orders at the Hyundai Heavy Industries Group’s three shipbuilders would double last year’s value at around $12.0 billion by the end of this year.

The pipeline is more than enough to keep the shipyards busy next year and beyond, and the backlog will pick up in 2018 and sales in 2019, said Hwang Uh-yeon, an analyst at Shinhan Investment Corp.

Hyundai Heavy Industries Chairman Choi Gil-sun in group business meeting with President Moon Jae-in last week said the Gunsan Dockyard, idle since early this year due to lack of work, will be able to be reactivated in 2019.

Hyundai Heavy Industries is hopeful of delivering additional mega-size orders within the next two weeks.

Yeo Yong-hwa, vice president at Hyundai Heavy Industries, in a conference call following release of the second-quarter earnings on Tuesday said the shipbuilder is waiting for a final decision of an order for a fleet of 20,000-TEU class containerships from a European client. The order reportedly has an option to deliver up to nine vessels.

By Moon Ji-woong

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