Good afternoon. We would like to thank you for your participation today. We would like to begin the Q1 2026 Earnings Presentation of HD Hyundai Group. As for this conference call, there's going to be a presentation earnings presentation, followed by a Q&A session. Let us begin HD KSOE's earnings presentation. Good afternoon, I am Gi-jong Seong, Executive Director overseeing Investor Relations for HD Hyundai Group. First of all apologies for some disruptions. Let us begin. Now, let us begin the Q1 2026 earnings presentation. Please note that Q1 results reflect the consolidated financials of HHI following the merger with Mipo completed last December. With that, I'd like to begin. I will first cover Q1 key highlights followed by operating performance. Before that, we like to examine key highlights.
After the earnings presentation, we will walk you through the market outlook for shipbuilding and offshore plants. We also have attendees from engine segment and two guests from the engine segment. If you have any related questions, we will be happy to answer them during the Q&A session. First of all, regarding the impact of exchange rates. The quarter-end exchange rate was KRW 1,513 per USD, up KRW 79 from the previous quarter, while the average rate increased by KRW 15 as a result. The earnings improvement attributable to foreign exchange movements was minimal, approximately KRW 10 billion in total. Second, steel plate prices saw only a marginal increase in Q1, resulting in an equally limited impact on earnings. Third, there were no one-off items this quarter. Very clean.
Performance bonuses, both internal and external, and these bonuses have been allocated in a quarterly basis in line with the estimated annual profit. Finally, I will share revenue breakdown by major vessel type for Q1. We would like to give you some updates. HHI, LNG carriers 43.9% decrease. LPG carriers and VLEC 33.5% increase. Container ships 15% increase. Tankers 6.5% increase. LNG carriers declined but others all increased. Now, Samho LNG carriers 40.1% increase again. Container ships 31.2% stable. Tankers 14.3% decrease. LPG carriers and VLEC 10.8%, slight increase. For mid-sized vessels, the proportion of gas carriers has increased.
For LNG bunker vessels, bunker vessels that many of you have been asking about one unit has now begun to be recognized in results. Let us now turn to page four, where I will walk you through Q1 consolidated results for KSOE. Consolidated revenue for Q1 decreased 0.1% quarter-over-quarter, while increasing 20.2% year-over-year. This was driven by a modest increase in the average exchange rate and higher vessel prices, a shift in vessel type mix, and continued productivity improvements, despite fewer working days compared to the previous quarter. Now operating profit grew significantly up 330.6% quarter-over-quarter and 57.8% year-over-year. Due to the merger with Mipo, I think these stellar achievements were possible.
Performance bonuses and related costs, which are higher than last year have been allocated and reflected in a quarterly basis. This quarter demonstrates a very stable and consistent improvement in earnings with no one-off items. I will address non-operating items later in the presentation. For consolidated results by major business segment on page five, please refer to the table provided. Let's move on to page six. I will begin with consolidated revenue for the shipbuilding segment. Although this is a seasonally affected quarter stable revenue growth has continued for several reasons I outlined earlier in the overall revenue discussion. Revenue decreased to 0.6% quarter-over-quarter, while increasing 14.6% year-over-year.
In the naval vessel segment, a shift in mix and a rebound in the export proportion drove revenue to KRW 281.8 billion, representing a 67.6% increase year-over-year. On a quarter-over-quarter basis, revenue declined 19.5%, largely due to seasonal factors. Turning to offshore plant. Despite fewer working days, the full ramp up of the Trion FPU and Ruya projects drove a substantial 184% year-over-year increase in revenue. However, revenue declined 17.3% quarter-over-quarter as the previous quarter had benefited from Shenandoah change order recognition. That should be taken into consideration. For engine and machinery, despite seasonal headwinds and higher proportion of dual fuel engines and an increase in selling prices drove growth of 14.7% quarter-over-quarter and 7.5% year-over-year.
Let us now move to page seven, operating profit by Business Segment. Shipbuilding segment operating profit increased 28.8% quarter-over-quarter and 42.1% year-over-year, driven by improvements in vessel time mix and productivity. Operating profit margin stood at 16.6%, up 3.8 percentage points from the previous quarter and 3.2 percentage points year-over-year, reflecting strong profit growth momentum. In the Offshore segment, operating profit surged to 1,212% year-over-year, in line with the significant revenue increase, on a quarter-over-quarter basis. However, operating profit declined to 10% as the prior quarter had included the benefit of Shenandoah change order impact. Now, Engine and Machinery operating profit grew 23.9% quarter-over-quarter and 41.3% year-over-year.
This was driven by revenue growth alongside and higher proportion of dual fuel engines, as previously discussed. DF engine ratio increased significantly from the prior quarter, reaching 73% for two-stroke engines and 79% for four-stroke engines. Operating profit in the naval vessel segment was KRW 34.3 billion, a substantial increase of 52.4% quarter-over-quarter and 34% year-over-year. This reflects the shift in vessel mix and increased proportion of export orders, as explained in the revenue section. I would like to reiterate that the naval vessel segment may be subject to significant earnings fluctuations on a quarterly basis. Please refer to the operating results table for consolidated subsidiaries on page eight. I will provide further details on page nine. First of all, KSOE on a standalone basis.
KSOE saw a larger improvement in earnings, driven by revenue growth in the SD division and an increase in dividend income from subsidiaries. At HD Hyundai Heavy Industries, revenue increased to 13.9% quarter-over-quarter, driven by a high exchange rate, rising vessel prices, and improved vessel time mix, and the consolidation of Mipo following the merger. Operating profit expanded 57.5% quarter-over-quarter, reflecting both revenue growth across all business divisions and meaningful improvements in profitability. This demonstrates a consistent improvement in profitability on a sequential quarterly basis. Beyond shipbuilding, clear signs of revenue growth and profitability improvement are also evident in the engine and offshore plant segments. Now, Hyundai Samho Industries, despite booking the highest level of performance bonuses, both revenue and operating profit increased quarter-over-quarter, supported by rising vessel prices and an improved vessel type mix.
The operating profit margin for Q1 stood at 18.6%. For better performance than Q4 last year. Let us now turn to page 10. Now, Hyundai Marine Engine, despite seasonal headwinds, the company delivered revenue growth of 20.3% quarter-over-quarter, with operating profit increasing 16.8% over the same period. This was attributable to a higher ASP for engines and an increase in production volume alongside concurrent growth in the pipes business. What's notable is that both utilization rate and production efficiency continue to improve simultaneously, and this is ultimately translated into a substantial improvement in profitability. The operating profit margin is 24.4%. Next, Hyundai Energy Solutions, whose results were already disclosed last week. While revenue grew 4.7% quarter-over-quarter, operating profit surged by as much as 100%.
Year-over-year comparison would be effective, I think. Sales volumes increased both domestically and internationally, and profitability improved significantly through selling price increases. In particular, a substantial expansion in the domestic market sustains sequential revenue growth despite being in the off-season. Page 11, which covers non-operating income and expenses. The rise in the Korean won-U.S . dollar quarter-end exchange rate generated FX-related gains, and there are no other significant items to highlight. Please refer to the slides for the remaining details. Page 12, Key Financial Ratios. All three major subsidiaries maintain a net cash position, and on a consolidated basis, KSOE holds approximately KRW 8.7 trillion in net cash. This reflects an exceptionally solid financial structure. This concludes the Q1 2026 earnings presentation covering the consolidated results of KSOE and its subsidiaries. Now, let us move on to commercial vessels and offshore plants.
Good afternoon. I am Unsum Lee, Executive Director of Strategic Sales at KSOE. I will now present an overview of the global new building market trends in Q1 2026 along with KSOE's shipbuilding order target for 2026 and our Q1 order performance. First of all, global new building market. The new building market in Q1 maintained solid momentum led by tanker orders. According to Clarksons, global new building orders in Q1 reached 36.9 million GT, representing an increase of more than 67% compared to 22.011 million GT in the same period of the prior year. This growth was driven by favorable freight rates for tankers and robust replacement demand for Asian vessels, alongside continued ordering activity in LNG carriers, LPG carriers, and container ships.
In summary, contrary to concerns that ordering volumes might moderate this year due to the rate of high order intakes in recent years, the new building market is performing better than expected. In line with this trend, Clarksons released its updated forecast at end of March, projecting full year 2026 new building orders at 115.7 million GT, a level broadly comparable to last year's 120 million GT approximately. For reference, Clarksons had previously forecast the 2026 ordering volume at 90 million GT in the second half of last year, so three consecutive years over 100 million GT. Now, our order target for this year. At the start of the year, we had concerns over a global economic slowdown, geopolitical risks, and the possibility of entering a down cycle following several years of elevated ordering activity.
At the same time, we determined that it was necessary to proactively secure order volume in response to the current unpredictable and uncertain market conditions, and set a more ambitious order target compared to the prior year. This year, HD Group's shipbuilding new order target is, in total, $170 billion. Breakdown by subsidiary, HD Hyundai Heavy Industries, $11.47 billion, and HD Hyundai Samho, $4.9 billion, and KSOE $0.66 billion. I will now discuss our Q1 order performance. Our group's shipbuilding subsidiaries secured a combined total of $6.39 in orders during Q1, achieving 37.5% of the full year target. By subsidiary, Hyundai Heavy Industries, $4.896 billion, Samho, $1.045 billion, and KSOE, $0.45 billion.
The order intake by vessel type is as follows: HD Hyundai Heavy Industries secured a total of 45 vessels, nine LNG carriers, four large container ships, two Suezmax tankers, and 16 feeder container ships, 10 MR tankers, two LR2 tankers, and two LCO2 carriers. 45 vessels. And Samho, five Suezmax tankers, VLGC, three VLGCs, one LNG, 39, and KSOE, six LR2 tankers through its Philippine yard, bringing the group's total order intake to 60 vessels. In the first half of this year, amid a market environment in which Chinese shipyards focused on expanding their order volumes primarily in tankers and bulkers, we maintained a selective ordering strategy centered on vessel types where we hold a competitive advantage, rather than engaging in direct volume competition.
As a result, by focusing on high-value vessel types, LNG carriers, VLGCs, and container ships rather than tankers, we were able to secure order volume while also improving profitability. Regarding new building prices, shipyards across the industry have secured sufficient order backlogs, and current new building prices remain firmly supported at elevated levels. We're making every effort to achieve qualitative improvements in terms of pricing and contract conditions, underpinned by our strong backlog position. I will now turn to the market outlook and our strategic response going forward. While geopolitical risks, including the protracted conflict in the Middle East and concerns over a slowdown in global economic growth continue to persist, current shipping market conditions are in fact showing favorable momentum, supported by short-term freight rate premiums stemming from uncertainty.
Vessel ordering demand driven by new energy demand also remains robust, including the full-scale resumption of LNG projects centered in the United States. However, if the conflict in the Middle East were to be prolonged, geopolitical uncertainty could potentially lead to a reduction in energy demand and an economic downturn, which in turn may give rise to differentiated patterns in ordering timing and investment decision-making across vessel types and ship owners. Accordingly, we will continue to closely monitor these risk factors while pursuing strategic order activities to capitalize the market opportunities in a timely manner, taking into account supply-demand dynamics and the competitive landscape for each vessel type. While market volatility is increasing, medium to long-term structural demand drivers, including tightening environmental regulations, accelerating energy transition, and replacement demand for aging fleets remain firmly in place and expected to continue underpinning ordering for our core vessel types.
In alignment with this market environment, we will pursue a balanced approach to both quantitative and qualitative growth, leveraging our technological competitiveness and accumulated commercial capabilities. This concludes our presentation on KSOE's Q1 2026 performance. Thank you.
Good afternoon. I am Namu Kim, Senior Manager of the Offshore Division. I'd like to briefly present our Q1 offshore business performance and market conditions. We're actively participating in upcoming offshore construction tenders across various regions, including the Mediterranean, Australia, and the Middle East. Middle East projects, in particular, expected to proceed through contractor selection and final contract from late Q2 through Q3. In our offshore wind power business, a key renewable energy segment, we're strengthening technical capabilities based on our proprietary in-house models while actively pursuing expanded project participation domestically and internationally.
In the offshore substation segment, leveraging competitiveness built through our proprietary Hi-OSS model, we achieved tangible results by signing early works contracts from multiple domestic offshore substation projects. Detailed engineering is currently underway, and following EPC contract process, we anticipate this year will mark a remarkable year of offshore wind construction and fabrication. In the floating structure segment, we continue with technical consultations and collaboration discussions with multiple developers based on our proprietary Hi-Float model. As commercialization of floating offshore wind has been delayed relative to initial expectations, we are striving to secure opportunities not only in the government-led domestic demonstration testbed, but also in small scale overseas demonstration projects. I will now briefly address our market outlook, and with TerraPower of the United States. We're currently undertaking a demonstration project.
After the signing of the contract last October, we are about to begin construction. Based on our close partnership with TerraPower, we are engaging in joint development and research for the commercialization of SMR, so we would be expanding further business opportunities in this. Now market outlook briefly. In Q1 2026, international oil prices surged sharply alongside a significant widening of price volatility driven by heightened geopolitical risks stemming from the conflict between the U.S., Israel, and Iran in the Middle East. That said, as oil prices remain at levels that underpin profitability and energy security continues to be emphasized across nations, oil and gas field development by major producing countries is expected to persist. Accordingly, stable order flows for offshore plant facilities are set to continue across various regions.
In the offshore wind power sector, it is true that some developers have begun pacing themselves in response to policy shifts and rising development costs. However, continuous investment and supply growth are expected to continue over the medium to long term. In the domestic market, in particular, the enforcement of the Special Act on the Promotion of Offshore Wind Power Distribution and Industrial Development on March 26th has further heightened expectations for the revitalization of the offshore wind market. Against this market backdrop, we're pursuing a balanced approach across our offshore wind and SMR businesses, continuing our sales activities with a strategy of selectivity and focus in order to secure our projects that ensure profitability and remain within a well-managed risk profile. With this, I'd like to conclude my remarks on the Q1 offshore energy business performance and market conditions. Thank you very much.
Now Q&A session will begin. Please press star three, that is star and three if you have any questions. Questions will be taken according to the order you have pressed the number star three.
지금 올해 수주를 만약에 못한다면 매출액이 조금 감소하는 영향을 받을 거고요. 그리고 금년 하반기부터 수리용 공사가 매출이 조금 빠지는 부분까지 고려한다 그러면 내년 한 1분기 정도까지는 매출이 그래도 안정적으로 흘러갈 것이고, 이후부터는 만약에 수주를 못한다면 이후부터는 매출이 조금씩 감소하는 모습을 띨 가능성이 있습니다.
This quarter, yes, we had a very good if there's no ordering, order that we land this year, then the revenue overall in the segment may go down coming into 2024.
감사합니다.
다음으로 질문해 주실 분은 메리츠증권의 배기연 님입니다. The following question will be presented by Gi Yeon Bae from Meritz Securities. Please go ahead, sir. 영향될 건지, 그 금액은 어느 정도인지 여쭤보고 싶습니다. 감사합니다.
Thank you for your presentation. My question is about the detailed performance. First of all, can you elaborate on your revenue performance for your SD business? It seems like your company is engaging in a range of new business opportunities, including India. How are you going to u Selected in Q2 as an expense?
먼저 첫 번째 답변 SD 사업부부터 먼저 말씀을 드리면, SD 사업부 매출액이 이번 분기에는 1,191억 원 반영이 됐습니다. 그리고 사고 부분에
Billion Korean won.
Hong Beom-do-ham 화재 사고에 대해서는 아직 화재 원인 조사가 진행 중이기 때문에 피해 규모라든지 복구 계획에 대해서는 아직 전혀 수립된 게 없습니다. 그래서 지금 질문 주신 대로 이번 분기 내에는 그런 내용은 반영되지 않을 것으로 판단하고 있습니다.
As to the fire incident you mentioned, we're still investigating. No remediation or recovery plans have been developed yet. As of that, within this immediate quarter, this fire incident will not be reflected in our performance.
SD 사업 부분에서 영업이익은 114억 원입니다.
For our SD business operating profit were KRW 11.4 billion.
네, 다음 질문 해주세요.
[Foreign language] The following question will be provided by Han Yong-Su from Samsung Securities. Please go ahead with your question.
안녕하세요. 삼성증권 한영수입니다. 두 가지 질문인데요. 첫 번째는 이번 신척에서 중형선 그 부분을 조금 갈라주실 수 있는지 궁금합니다. 중형선 쪽에 매출 영업이 조선소들이 globally 그 name value가 있진 않아서 예전에 현대 미포 있을 때도 베트남 조선소 수주를 미포가 해서 이렇게 그 수주를 확보해서 재발주하는 형태가 있었던 걸로 기억을 하는데요. 그러면 향후에 필리핀이나 다른 조선소들도 현대중공업이 브랜드 가치를 앞세워서 그런 역할을 해서 재발주를 해주는 약간 그런 형태일지 궁금합니다. 감사합니다.
Is about the business model of your overseas subsidiaries. You do have a business operations in the Philippines, but I don't think the Philippines is a country recognized for its shipbuilding industry in terms of name value. Previously, Mipo won orders, then it'll give these orders to a subsidiary in Vietnam. That's how business was operated. Is it going to be a case that the same applies to your Philippine operations? For example, HHI will let Operated.
일단 중형선 부분은 저희들이 과거 미포조선이기 때문에 그 부분만 따로 말씀드리지는 않는 걸 원칙으로 하고, 단지 수익성 측면에서는 대형선, 현대중공업 대형선 부분하고 큰 차이는 나지 않습니다. 그것만 참고로 말씀드리겠습니다.
If I answer your first question as to our mid-sized vessel business, it was previously in Mipo. There won't be big differences between Hyundai Heavy Industries and our mid-sized vessel operations in terms of profitability.
예. 한국조선해양의 류석주 전무입니다. 저희 조선소 영업 관련해서 말씀드리면 이해하고 계신 바가 맞습니다. 기본적으로 한국의 본사의 기술력이라든지 브랜드 파워를 기준으로 활용해서 해외 조선소 영업을 진행하고 있고, 실제로 그런 걸 통해서 배삼 같은 경우 수월하게 해외 수주를 달성할 수 있었습니다. 향후에 추가로 해외 조선소 영업 확장하게 되더라도 똑같은 방식으로 본사에서의 능력을 활용해서 해외 확장하는 방향으로 전략을 추진해 나갈 예정입니다. 이상입니다.
Thank you for your question. Your understanding about our operating model covering our overseas shipyards would be correct. Leveraging our technological prowess and brand value at the headquarter level in Korea We're getting positive feedback and evaluations. In the Philippines, again, we're leveraging our capabilities at the headquarters in Korea and landing orders from overseas. When we further expand our global footprint, this approach would apply as well. Using our headquarter capabilities and broadening our global presence.
죄송한데 말씀하신 본사가 HD Korea Shipbuilding & Offshore Engineering이 아니라 HD Hyundai Heavy Industries로 말씀하신 거 맞는지만 확인 좀 부탁드립니다.
For the clarification, when you say?
조선해양이 맞습니다. 예.
KSOE, I would say. Not HD Hyundai Heavy Industries. KSOE.
다음으로 질문해주실 분은 NH투자증권의 정연승 님입니다. The following question will be provided by Yeon Seung Jung from NH Investment & Securities. Please go ahead with your question.
네, 안녕하세요. NH투자증권 정연승입니다. 생산 캐파 확장이 좀 필요하지 않을까 생각하는데요. 혹시 내부적으로 어떻게 보시는지 하고요. 두 번째로는 엔진 관련해서 좀 더 질문을 드리면, 라이센스를 보유한 기업 중심으로 좀 수주가 나오고 있는데 이게 워낙 쇼티지 상황이라서 면허 생산하는 기업들까지도 좀 시장이 확장되는 기회가 될지, 아니면 라이센스 있는 기업들 중심으로 좀 진행이 될지. 두 가지 질문드리겠습니다. 감사합니다.
Questions?
What is your internal view about the need for capacity expansion? That's my first question. My second question is, it seems like engine business is focused on those companies holding licenses. Given shortages which are happening currently and given market expansion opportunities, is it going to be a focus on those license-owning companies or other companies as well?
네, 엔진 기계 사업부에서 답변드리겠습니다. 생산 캐파를 가지고 있고, 현재 생산력으로는 지금 현재 가동 또는 발전 물량을 고려했을 때 좀 더 높은 가동률을 기록하고 있습니다. 그리고 저희 그룹사 내에 있는 수주 선박에 대해서도 엔진 납품을 계속 공급을 해야 되기 때문에 현재 captive 물량 기준으로는 부하가 많이 차 있는 편입니다. 근데 데이터센터형 발전용 엔진 수요 특징에 따라서 다방면으로 저희 옵션을 만
If I answer your first question, mentioning our engine capacity, it's four million horsepower and three GW. Given our current capacity, we're recording a quite high utilization rate to keep up with our current capacity, especially for generation purposes. But we still need to supply our product for our. There is a surge in demand for data center applications as well. We're reviewing possible feasible options for. Based on the order and demand, our capacity expansion plan will be aligned with future demand orders.
두 번째 질문에 대해서 답변을 드리면, 현재 수주 경향으로 봤을 때는 자체 라이센스를 보유하고 있는 라이센서 위주로 데이터센터형 수주에 대해서 대응을 하고 있는지 여부는 저희가 확실하게 파악하고 있지는 못하고 있지만, 원가 경쟁력 측면에서는 고려하시는 바와 같이 라이센스피를 내기 때문에 기존에 있는 라이센서들의 가격 경쟁력 우위는 있다고 보셔서, 저희는 일단은 그 점에서 선점 효과를 누리고 있다고 보시면 되겠습니다.
Given the current order winning trend, We do not 100% sure about whether licensee engines are also responding to data center demand. Given cost competitive edge, there are license fees to be considered, which means existing licensor companies have a dominant position in terms of cost competitive edge. In that sense, our company, well, is also better positioned than others in this market.
캐파 증설 관련해서는 저희들이 다각도로 검토 중에
About capacity expansion, we're under review, but this subject is for disclosure. When detailed plans are confirmed, we can give you further information.
예, 다음 질문 부탁드릴게요.
[Foreign language] The following question will be provided by Dong Hun Lee from Shinhan Investment & Securities.
증설은 공지사항일 텐데, 이 증설의 난이도가 궁금한데요. 캐파를 늘리는 게 어느 정도 어려움인지, 또는 마음만 먹으면 할 수 있는 건지 난이도가 궁금하고요. 질문드린 이유가 2030년까지 납품하는 걸로 계약 공지가 나와 있는데, 이걸 좀 당길 수 있는 여지가 있는지가 궁금합니다. 두 번째는 이 시장에 대해서 최근에 열려 있는 것, 6,271억 계약한 공시에 대한 스펙 같은 게 공개가 가능한 수준에서 말씀을 부탁드립니다. 대략 이게 100메가인지 20메가인지, 주 발전 용도로 쓰이는 건지, 연계해서 어떤 건지 전반적인 사항들이 궁금합니다. 감사합니다.
I have two questions about your engine business. First of all, I know that if you are to expand your capacity, of course, you need to make disclosure. Difficult would that be? That's my first question. Also according to your disclosure, your supply plan is scheduled through 2030. I'm asking this question because I'm wondering whether you can further speed up the overall plan so that you can supply your products earlier than 2030. My second question is, this very market is just opening. As an analyst, we're not fully grasping this market development. What's the atmosphere? Data center contract, and I'm wondering whether you can elaborate on this very contract. For instance, the amount of megawatts to be installed and whether it's going to be for power generation and other aligned matters about this very contract.
첫 번째 질문에 대해서 답변드리겠습니다. 앞서 말씀드린 대로 엔진 기계 사업부는 한 3기가 정도의 매년 생산 실적을 가지고 있기 때문에, 요 기자재를 내재화 생산을 하고 있습니다. 그래서 생산 Capa를 증가를 하는 부분에 대해서는 크게 조립공장과 주요 기자재로 나눌 수 있겠지만, 조립공장을 Capa를 치는 거는 물론 이제 저희가 좀 고민을 또 하고는 있겠지만 크게 어려울 거는 없을 것 같습니다. 그리고 주요 기자재에 대해서도 저희가 국내 Supply Chain과 또 좋은 긴밀한 관계를 갖고 있기 때문에 같이 성장한다고 하면 특별한 어려움은 없을 것 같습니다.
Very well established supply chain in Korea. We have an integrated production system, which is one of our strengths. Also we have internalized the necessary equipment and pipes as well. If we are to expand our capacity, we can think of two pillars, assembly plant and pipe and equipment. In terms of the assembly factory, it won't be that much difficult to expand our capacity in terms of assembly plant operations. As to the equipment as well, because we have a very well-established supply.
두 번째 질문은 엔진발전 담당하고 있는 박종국 상무가 답변드리겠습니다. 최근에 데이터센터 시장은 여러 기사에서 보시다시피 성장은 분명히 하고 있고 많은 전력을 필요로 하고 있습니다. 저희 쪽도 지속적으로 인허가를 받고 있고요. 기존의 Grid line 연결이 계속 지연되면서 온사이트 발전 그리고 엔진 수요도 중장기적으로 성장할 것으로 전망을 하고 있습니다. 그리고 첫 번째 질문에 포함된 29년, 30년으로 저희가 하나 낙품으로 계약이 돼 있습니다. 그리고 이번에 계약한 공사에 대해서 스펙을 조금 공유해 달라고 하셨는데, 저희가 이번에 수주한 건 660메가와트고 총 33대입니다. 엔진 모델은 16H54GV라는 모델이고, 한 엔진당 출력은 약 22메가와트입니다. 11개씩 총 3개 사이트. 상세한 사양은 저희 엔진에 나와 있는 스펙하고 같다고 보시면 되겠습니다. 특별한 사양은 없고, 대신 미국에서 요구하는 Emission 인증 그리고 UL 인증까지 포함돼 있습니다. 이상입니다.
If I answer your second question, this data center market is certainly growing, and it highlights the need for more power and electricity. We keep continue to see relevant needs and demands and expectations from our clients. Still, we have an issue with the installation. About the contract with the 2030 set as a delivery year. Our customer also has a power plant construction schedule. In line, in alignment with the very schedule, we will be also splitting our supply in 2028, 2029, and in 2030. It is aligned in that way. As to the detailed specifications of this construction, it's going to be 660 MW. It's going to be 11 installations across the three different sites.
The scope of this contract will be engine, power generation, relevant control, installation, and necessary audit as well. For details about this contract, we have already publicly available data. Because of customer requirements from the United States, we have certifications to achieve, including UL certification.
The following question will be provided by Gi-yeon Bae from Meritz Securities. Please go ahead with your question.
Uh, the [Foreign Language]
About your investment plans targeting India. As you know, President Yoon Suk Yeol toured around India last month. It seems like that investing in India is being encouraged. I wonder if there is any commitment to, for example, ordering how many commercial vessels from the Indian side over the next few years. Even though it won't be feasible for you to give us any official information, at least can you let us know that you are going in the right.
Recently, that competitor is really advancing into this specific area, and it seems like your company can also think of offshore or engine and machinery business opportunities. For instance, capturing EPC and turnkey business opportunities in this sector. Can you give us any update on this? Visited India. Our group chairman also accompanied him and met key figures, European leaders in India.
We are pretty sure that there's going to be support from India in building a greenfield shipyard in this country. Internally, we're currently engaging in a feasibility study about establishing a greenfield shipyard in the country. There's going to be support from India as well. There's no concrete and detailed commitment about how much commercial vessel a greenfield shipyard is to be established. It's going to be meeting the domestic internal demand of India across multiple vessel types.
Marine solution. [Foreign Language] 은 실제 conference call에서 언급되어온 바와 같이 신조 및 개조 등 다양한 방법 등에 대해서 제안되고 있고, 현재로는 사실 매우 초기 단계이긴 하나 문의가 있어서 중장기 미래 성장 시장으로 생각되고 검토되고 있습니다.
If I answer your question about floating data centers, I believe that we are sufficiently equipped to enter this market, both in terms of technology capabilities and engineering capabilities as well. Way for operating those powerships. We're sure that we have competitive edge over our competitor in this sense. As was mentioned in the press, earnings call of Hyundai Marine Solution, there could be a variety of ways that we can present to our customers, including new builds and retrofits. In this market is still in its nascent stage. What we believe we can witness growth over the medium to long term in this market.
The following question will be pre-provided by Sang-Jin Byun from iM Securities. Please go ahead with your question.
네, 안녕하세요. iM증권 김영진입니다. 그냥 엔진 사업부 이익 관련 간단한 질문이고요. 저희 그 중동업 엔진 사업부 이익률은 20% 정도로 좀 더 상승을 했고, 반면에 마린 엔진 이익률은 25% 정도로 좀 약간 주춤한 상태인데 양 사업부의 그 엔-이익률이 앞으로 뭐 중동업 엔진이 좀 많이 베네핏을 받으실 것 같습니다.
You have an engine business under HD Hyundai Heavy Industries, and also you have HD Hyundai Marine Engine, and it seems like Hyundai Marine Engine, our profitability is remaining rather flat around 25%. Based on profitability, is it correct or safe to say that Hyundai Heavy Industries engine operations will be having around 29% profitability?
마린 엔진은 거의 25%의 OPM이 나오고 있습니다. 상당히 높은 마진이라고 생각하시면 될 것 같고, 추가적으로 여전히 가동률이 상대적으로 현대중공업 엔진 사업부보다는 조금 낮은 편이에요. 그래서 추가적인 어떤 가격 상승, 그다음에 또 한 가지 변수가 환율이죠. 이런 것들이 같이 맞물린다 그러면 실적 개선이 조금은 더 있을 수 있다고 보여집니다. 그리고 현대중공업 엔진 사업부 엔진 가격 상승이 계속 이루어지고 있는 상황이기 때문에 환율 조건만 좀 더 잘 맞아진다 그러면 실적 개선은 충분히 더 이루어질 수 있다, 이렇게 판단이 됩니다.
Hyundai Marine Engines OPM, operating profit margin, is around 25%, and this is quite high already. Hyundai Marine Engines utilization rate is lower compared to Hyundai Heavy Industries engine operations. With further price increases and favorable. Look at Hyundai Heavy Industries engine business, the proportion of dual fuel engines is increasing. In both operations, Hyundai Marine Engine and Hyundai Heavy Industries, with engine prices increasing, and if FX rates are favorable, then we can surely expect further improvement in profitability.
그리고 지금 데이터센터용 엔진이 2028년부터 이제 매출이 발생하게 될 텐데요. 이 부분까지 매출이 계속 발생을 하게 되면-
I'd like to note that the engine for data center applications and the revenue would be recognized from 2028 onwards. If you consider that, there can be a further boost to the profitability of our engine business.
네, 여기까지 말씀드렸고, 저희도 시간이 좀 늦게 출발했기 때문에 지금까지 좀 끌었는데요. 시간을 좀 더 줄이게 했는데, 정말 마지막으로 질문 한 가지만 받고, 마치도록 하겠습니다.
[Foreign language] The last question will be provided by Han Yong-Su from Samsung Securities. Please go ahead with your question.
해양 관련해서 아까 수주를 올해 못하게 되면 내년에 매출 유지를 말씀을 주셨는데, 공교롭게 지금 얘기하신 프로젝트들이 중동인 것 같아서요. 이것들이 혹시 지연돼 좀 드리고요. 혹시 가능하면, 특수선 수주 관련해서 최근에 단기에 좀 저희가 기대할 수 있는 프로젝트 있는지 한 번만 언급 부탁드리겠습니다. 감사합니다.
Two final questions. The first question is about your offshore business. You mentioned that if you do not land any further orders this year, then the revenue may decline starting from next year. The projects that you mentioned are all taking place in the Middle Eastern region. Are there any risks of those projects being? My second question is about your special vessel business. In the short term, can you mention any projects that we can put our expectations on in the short term?
Yeah. [Foreign Language]
The tenders that we're currently participating, they are spread across the UAE, Saudi Arabia, Kuwait and other countries, and it normally takes three to six months or even more if you look at offshore construction tenders. Because of the war in Iran, maybe slightly, there could be slight delays, but we have already submitted our prices and have been in already. The overall process is going on as usual and we're closely contacting our No significant delays in this sense.
Inaudible. [ Foreign Language]
Thailand, because we have submitted our proposal in April for the frigate project in the country and elsewhere in the Philippines. We will be participating in next generation frigate project in the Philippines as well as multipurpose support vessel in Malaysia. Across southeastern countries, bidding processes are ongoing, we will be hearing news about these potential projects. We cannot mention any specific country name, but across continents, we're working across.
[Foreign Language]
As you know, our business presence spans a variety of areas, shipbuilding Complex and disrupted. I believe our business we would emerge even stronger and we would be even busier amid such and such market conditions. With this, we would like to conclude our Q1 2026 earnings presentation. Thank you very much.
Good afternoon. We would like to thank you for your participation today, and we would like to begin the Q1 My business is continuing our sales activities with a very short performance and market conditions. Thank you very much. With this, I'd like to Well-managed risk profile. With this, I'd like to conclude my remarks on the Q1 offshore energy business performance and market conditions.
Thank you very much. [Foreign Language]. Now Q&A session will begin. Please press star three, that is star and three, if you have any questions. Questions will be taken according to the order you have pressed the number star three. If there's no ordering, orders that we land this year, then the revenue overall in this segment may go down coming into 2021.
Thank you for your presentation. My question is about the details for . How are you going to use Korean won. As to the fire incident you mentioned, we're still investigating. Remediation or recovery plans have been developed.
Go ahead with your question.
I believe our business will be back in my next presentation. Thank you. Thank you very much.
Good afternoon. We would like to thank you for your participation today. We would like to begin the Q1 2026 earnings presentation of HD Hyundai Group. As for this conference call, there's going to be a presentation, earnings presentation, then followed by a Q&A session. Let us begin HD KSOE's earnings presentation. Good afternoon. I am Gi-jong Seong , Executive Director overseeing investor relations for HD Hyundai Group. Apologies for some disruptions. Let us begin.
Good afternoon.