South Korean shipbuilder Hanwha Ocean swung back into profit during its 2023 financial year, posting a net profit of KRW 160bn ($119.8m) compared with a loss of KRW1.74tn a year earlier, when it was known as Daewoo Shipbuilding & Marine Engineering.

The shipyard group reported that its sales jumped 52.4% year on year to KRW 7.4tn, although its operating balance remained in the red.

Hanwha Ocean said it has narrowed its operating loss to KRW 196.5bn for fiscal year 2023, compared with a loss of KRW 1.61tn for 2022.

A surprising turnaround was made during the third quarter of 2023 when it earned a net income of KRW 231.6bn compared with losses of KRW 646.6bn from the corresponding quarter a year earlier.

This was the company’s first profitable quarter since the fourth quarter of 2020.

During the last quarter of 2023, Hanwa Ocean chalked up KRW 286bn in net income, but logged an operating loss of KRW 48.8bn, compared with the operating loss of KRW416.1bn for the same period in 2022.

The company attributed this fourth-quarter loss to an increase in one-off wage costs for stabilising shipbuilding production and special support funds for partner companies.

Looking ahead, Hanwha Ocean said it was optimistic that 2024 will be a profitable year as it will finish delivering the remaining low-price newbuildings contracted in 2021 and early 2022, and begin delivering more recently contracted high-value vessels such as LNG carriers.

Shipbuilding brokers said Hanwha Ocean has become selective when entering newbuilding contracts, focusing on high-value vessels such as LNG carriers and dual-fuel ships.

The shipyard is poised to win an order for a dozen 174,000-cbm LNG carriers worth $2.58bn from Middle Eastern gas producer QatarEnergy.

Hanwha Ocean has inked one newbuilding contract so far in 2024.

Greece’s Alpha Gas was reported to have commissioned the shipyard to build two very large LPG-ammonia carriers announced $123.5m each. It is scheduled to take delivery of the duo by the end of August 2027.

Hanwha Ocean — the world’s fourth largest shipyard— came under the control of Hanwha Group in May 2023, when the business conglomerate acquired a 49.3% stake for KRW 2trn.