The future of Hyundai Heavy Industries Co. became murky again after it becomes standalone shipyard minus the lucrative non-shipbuilding operations scheduled to be spun off in April.

Hyundai Heavy Industries last year generated an operating profit of 1.2 trillion won ($1.04 billion) from its non-shipbuilding sector and 700 billion won from shipbuilding. Korea’s largest shipbuilding group last year announced a plan to split into six separate entities by spinning off all non-shipbuildling operations.

The shipbuilder’s electro and electric system division is estimated to have raked in 160 million won in operating profit in 2016, higher than the 150 billion won income from offshore plant business. The division to be dubbed as Hyundai Electric & Energy System produces transformers, high voltage circuit breakers, rotary machines and distributing boards, and competes over the largest share in the domestic market with Hyosung Corp. Share of exports in its sale amounts to 64 percent. It has been active in markets in the Middle East and Americas.

The construction equipment division earned 78.1 trillion won from operation last year. The excavators and wheel loaders manufacturing unit is also highly competitive in the nation and a strong rival to Doosan Infracore Co. Its share in the global market is paltry 2 percent, but is expanding fast in the United States, China and India.

Refining subsidiary Hyundai Oilbank Co. recorded its largest-ever operating profit of 960 billion won last year, contributing largely to the shipbuilder’s consolidated balance sheet. Hyundai Heavy Industries holds a 91.1 percent stake in the company but the stake will go to Hyundai Robotics which is to become a holding company after the demerger.

After completing the disposal of the non-core businesses, Hyundai Heavy will be left with shipbuilding, offshore drilling, and engine making businesses. Its financial statement could be questioned as non-shipbuilding units have largely sustained the group amid slump in the global shipbuilding market.

Shares of Hyundai Heavy Industries closed Monday at 148,000 won, up 0.68 percent or 1,000 won from the previous session.

By Moon Ji-woong

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]