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Korea Investment & Securities: FX Headwinds to Dent Q3 Earnings for Major Shipbuilders Except Samsung Heavy
Electronic Technology · Electronic Equipment/Instruments · yonhap_finance · 2026-08-24
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Korea Investment & Securities projects a decline in Q3 operating margins for major Korean shipbuilders due to falling exchange rates, with Samsung Heavy Industries as the sole exception.
What Happened
FX Impact on Earnings: Korea Investment & Securities reports that the decline in the average KRW/USD exchange rate in the third quarter is expected to negatively impact the profitability of major shipbuilders. The stronger won acts as a direct headwind for these export-oriented companies, compressing their operating margins.
Sensitivity Analysis: HD Hyundai Heavy Industries, HD Hyundai Samho, and Hanwha Ocean show high sensitivity to currency fluctuations, making them vulnerable to the current downward trend in the exchange rate. In contrast, Samsung Heavy Industries remains largely insulated from these currency-driven earnings fluctuations.
Labor Cost Pressures: The third quarter is also expected to face additional earnings pressure from labor-related costs, specifically potential one-time payments following the conclusion of collective bargaining agreements. Historically, the second half of the year often sees increased personnel expenses impacting bottom-line results.
Samsung Heavy's Outlook: Samsung Heavy Industries stands out as a preferred pick due to its resilience against FX volatility and potential new orders for floating data centers in the second half. While peers struggle with macroeconomic headwinds, Samsung Heavy maintains a more favorable short-term investment profile.