Good afternoon. We'd like to thank you for your participation today, and we'd like to begin the Q1 2026 earnings presentation of HD Hyundai Group.

As for this conference call, there's going to be a earnings presentation and then followed by a Q&A session. Let us begin HD KSOE's earnings presentation.

Good afternoon, I am Ki-jong Sung, Executive Director overseeing Investor Relations for HD Hyundai Group. Apologies for some disruptions, and 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, and I will first cover Q1 key highlights and followed by operating performance. Before that, we'd like to examine key highlights.

After the earnings presentation, we will walk you through the market outlook for shipbuilding and offshore plant. We also have attendees from engine segment and two guests from the engine segment, if you have any related questions, we would be happy to answer them during the Q&A session.

Regarding the impact of exchange rates, the quarter-end exchange rate was 1,513 won per USD, up 79 won from the previous quarter, while the average rate increased by 15 won. As a result, the earnings improvement attributable to foreign exchange movements was minimal, approximately 10 billion Korean won 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 on a quarterly basis in line with the estimated annual profit. Finally, I will share revenue breakdown by major vessel type for Q1.

We'd like to give you some updates. HHI: LNG carriers 43.9%, decrease; LPG carriers and VLACs 33.5%, increase; container ships 15% increase; and tankers 6.5% increase.

LNG carriers declined, but others all increased. Now, Samho: LNG carriers 40.1%, increased again; container ships 31.2%, stable; tankers 14.3%, decrease; LPG carriers and VLACs 10.8%, slight increase.

For mid-sized vessels, the proportion of gas carriers has increased, and for LNG 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 4, 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 30.6% quarter-over-quarter and 57.8% year-over-year. Due to the merger with Mipo, I think these stellar achievements were possible.

Now, performance bonuses and related costs, which are higher than last year, have been allocated and reflected on a quarterly basis. Now, 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 5, please refer to the table provided.

Let's move on to page 6. 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 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 281.8 billion Korean won, 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, a 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 7, 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 type 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 1,212% year-over-year in line with the significant revenue increase.

On a quarter-over-quarter basis, however, operating profit declined 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 a higher proportion of dual-fuel engines, as previously discussed. DF engine ratio increased significantly from the prior quarter, reaching 73% for 2-stroke engines and 79% for 4-stroke engines.

Operating profit in the naval vessel segment was 34.3 billion Korean won, 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 segment.

I'd 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 8.

I will provide further details on page 9. 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 Hyundai Heavy Industries, revenue increased 13.9% quarter-over-quarter, driven by a high exchange rate, rising vessel prices, an improved vessel type 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 Heavy 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%, so far 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 parts 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 sustained sequential revenue growth despite being in the off-season. Page 11, which covers non-operating income and expenses: the rise in the Korean won US 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. Now page 12, key financial ratios.

All three major subsidiaries maintain a net cash position, and on a consolidated basis, KSOE holds approximately 8.7 trillion Korean won 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 plant.

Good afternoon, I am Eun-Seok Lee, Executive Director of Strategic Sales at KSOE. I will now present an overview of the global newbuilding market trends in Q1 2026 along with KSOE's shipbuilding order target for 2026 and our Q1 order performance.

Global newbuilding market: the newbuilding market in Q1 maintained solid momentum led by tanker orders. According to Clarksons, global newbuilding orders in Q1 reached 36.9 million GT, representing an increase of more than 67% compared to 22.01 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 aging 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 weight of high order intakes in recent years, the newbuilding market is performing better than expected. In line with this trend, Clarksons released its updated forecast at end of March, projecting full-year 2026 newbuilding 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. 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 shipbuilding new order target is in total $17 billion. Breakdown by subsidiary: HD Hyundai Heavy Industries $11.47 billion, and HD 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 billion 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: 9 LNG carriers, 4 large container ships, 2 Suezmax tankers, and 16 feeder container ships, 10 MR tankers, 2 LR2 tankers, and 2 LCO2 carriers.

So 45 vessels. Samho: 5 Suezmax tankers, 3 VLGCs, 1 LNG, 39, and KSOE: 6 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 newbuilding prices, shipyards across the industry have secured sufficient order backlogs, and current newbuilding 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 on 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 shipowners.

Accordingly, we will continue to closely monitor these risk factors while pursuing strategic order activities to capitalize on 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 are 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 Nam-Woong 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 are 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 for multiple domestic offshore substation projects. Detailed engineering is currently underway, and following the EPC contract process, we anticipate this year will mark a remarkable year of offshore wind construction and fabrication.

In the floating structure segment, we continued 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 test bed, but also in small-scale overseas demonstration projects.

I will now briefly address our market outlook. 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, we will 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 US, 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, and 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 deployment and industry development on March 26 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, 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.

자, 이어서

Thank you for your presentation and congratulations on your very good performance this quarter. I have two questions.

The first question of proportion of ordering years in terms of revenue recognition in your commercial vessel segment. My second question is given base effects, still operating profit in your offshore segment is very good, and is it feasible to expect that such good operating profit performance will continue in the years ahead?

네, 답변드리겠습니다. 일단 매출 인식부터 상선 말씀드리면 현대중공업 기준으로

2022년도가 14%, 23년이 53%, 24년이 29%, 25년이 4%이고요. 그다음에 삼호중공업 기준으로 22년이 5%, 23년이 43%, 24년이 49%, 그리고 25년이 예 3%입니다.

지금 미포조선 합병으로 인해서 되게 중형선 부분을 따로 제가 한 번 더 말씀을 드릴게요. 앞서 말씀드린 현대중공업은 대형선 기준이고, 중형선 기준으로는 22년 물량이 없습니다.

23년이 26%, 24년 71%고 25년이 3% 예 수준입니다.

First question, let me first mention HHI, which deals with large-sized vessels. By year, its revenue recognition will be 14% in 2022, 53% in 2023, 29% in 2024, and 4% in 2025.

Now Samho: 5% in 2022, 43% in 2023, 49% in 2024, and 3% in 2025. After the merger with Mipo, we'd like to separately mention mid-sized vessel business.

In 2022, there was no volume, and in 2023, 53%, and in 2024, 29%, and in 2025, 4%—excuse me. No volume for 2022, and then for 2023, 26%, 71% for 2024, and 3% for 2025.

네, 다음은 해양 부문 실적에 대해서 말씀을 드리겠는데요. 이번 분기가 좀 많이 나왔습니다.

저희들이 현재 두 개 공사가, 특히 루야 프로젝트가 이번에 본격적으로 반영이 되면서 매출이 급증을 했고, 이 부분이 내년 상반기까지, 올해 연말까지는 계속 이어질 걸로 예상을 합니다. 수익성에 대해서는 지금

17.4% 영업이익률이 나왔는데, 조금은 낮아질 수도 있겠지만 고수익성을 유지를 할 거는 같습니다. 예, 그리고 내년도 2, 3분기부터는 지금 올해 수주를 만약에 못 한다면 매출액이 조금 감소하는 예 영향을 받을 거고요.

그리고 금년 하반기부터 트리온 공사가 매출이 조금 빠지는 부분 예까지 고려한다 그러면 내년 한 1분기 정도까지는 매출이 그래도 안정적으로 흘러갈 것이고, 만약에 수주를 못 한다면 이후부터는 매출이 조금씩 감소하는 모습을 띨 가능성이 있습니다.

This quarter, yes, we had a very good performance, and especially we have two projects ongoing, and especially the Ruya project has begun at full scale, which is contributing to a good performance in terms of operating profit. By the end of this year, I think this will continue.

Given the operating profit of 17.4%, this may go down, but we believe anyway high profitability could be maintained. Looking into the second and third quarter of 2027, if we do not land any further orders this year, then overall revenue may go down.

If you look at the second half of 2026 and the revenue from the Trion project may go down in the second half of 2026, but still we see a bit of stability going into Q1 of 2027. As I mentioned, if there's no orders that we land this year, then the revenue overall in this segment may go down coming into 2027.

감사합니다. 다음으로 질문해 주실 분은 메리츠증권의 배기연 님입니다.

SD사업부 매출액이 얼마였는지랑 그리고 저희 신규 사업 진행을 많이 하시는데, 인도라든지 여러 신사업에서 이 SD사업을 어떻게 지금 활용하고 매출액이 얼마나 좀 나올 수 있는지 여쭤보고 싶고요. 그리고 간단한 질문 추가로 좀 말씀을 드리면 홍범도함 화재 건 관련돼서 언론 보도 나온 게 있는데, 요게 2분기 때 비용이 반영될 건지 그 금액은 어느 정도인지 여쭤보고 싶습니다.

감사합니다.

Thank you for your presentation. My question is about the detailed performance.

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, and how are you going to utilize your SD business capabilities and how much revenue are you expecting?

Concerning the fire incident, is it going to be reflected in Q2 as an expense? 네, 먼저 첫 번째 답변

SD사업 부문부터 먼저 말씀을 드리면, SD사업부 매출액이 이번 분기에는 1,191억 원 반영이 됐습니다. 예.

그리고 사고 부분에

For SD business, our revenue this quarter was 119.1 billion Korean won. 네, 홍범도 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

2사분기 내에는 그런 내용은 반영되지 않을 것으로 판단하고 있습니다.

As to the fire incident you mentioned, we're still investigating the cause behind this fire incident. We do not know accurately what the magnitude of losses would be, and no remediation or recovery plans have been developed yet.

As you said, within this immediate quarter, this fire incident will not be reflected in our performance.

SD사업 부문에서 영업이익은 114억 원입니다.

For our SD business, operating profit was 11.4 billion Korean won. 네, 다음 질문 해 주세요.

다음으로 질문해 주실 분은 삼성증권의 한영수 님입니다. The following question will be provided by Han Young-Soo from Samsung Securities.

Please go ahead with your question. 아, 네, 안녕하세요.

삼성증권 한영수입니다. 두 가지 질문인데요.

첫 번째는 이번 실적에서 중형선 그 부분을 조금 그 발라 주실 수 있는지 궁금합니다. 중형선 쪽의 매출, 영업이익, 이익률이 얼마나 나왔는지 사실 궁금하고요.

그다음에 두 번째는 해외 자회사들 이제 새로운 야드들 영업 형태에 대해서 여쭙고 싶은데, 아무래도 필리핀이나 뭐 이런 조선소들이 글로벌리 그 네임 밸류가 있지는 않아서 예전에 왜 현대미포 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 해 주는 약간 그런 형태일지 궁금합니다.

감사합니다.

Out of

your mid-sized vessel business, can you give us detailed information on its revenue and operating profit? My second question 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 would give these orders to its 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 land orders leveraging its brand value, then it will give some works to its subsidiary in the Philippines. That's how the business will be operated?

네, 첫 번째 말씀을 드리면 일단 중형선 부분은 저희들이 어 그 과거 미포조선이기 때문에 그 부분만 따로 이렇게 말씀드리지는 않습니다. 아 안는 걸 원칙으로 하고, 단지 수익성 측면에서는 어 대형선 현대중공업 대형선 부분하고 큰 차이는 나지 않습니다.

예, 그것만 참고로 말씀드리겠습니다. If I answer your first question as to our mid-sized vessel business, it was previously Mipo, in principle, we do not separately mention relevant performance details.

In terms of profitability, what I can say is there won't be big differences between Hyundai Heavy Industries and our mid-sized vessel operations in terms of profitability. 예, 상선영업본부 이우석 전무입니다.

해외 조선소 영업 관련해서 말씀드리면은 이해하고 계신 바가 맞습니다. 기본적으로 한국의 본사의 기술력이라든지 브랜드 파워를 기준으로 해서 활용해서 해외 조선소 영업을 수행하고 있고, 실제로 그런 걸 통해 갖고 어 베트남 같은 경우에 이미 시장에서 좋은 평가를 확보했고, 어 필리핀도 이를 바탕으로 해 가지고 어 본사에서의 그 실적을 바탕으로 해 갖고 수월하게 해외 수주를 달성할 수 있었습니다.

향후에 어 추가로 해외 조선소 영업 어 확장에 있어서도 똑같은 방식으로 본사에서의 기술력을 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 headquarters level in Korea, we're landing orders and then giving orders back to our subsidiaries overseas. With this business model, 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 headquarters capabilities and broadening our global presence.

아, 죄송한데 말씀하신 본사가 한국조선해양이 아니라 현대중공업으로 말씀하신 거 맞는지 확인 좀 부탁드립니다. A further clarification: when you say headquarters, does it refer to Hyundai Heavy Industries or any other entity?

예, 기본적으로 한국조선해양이 맞습니다. 예.

KSOE, I would say, not Hyundai Heavy Industries, KSOE. 다음으로 질문해 주실 분은

NH투자증권 정연승입니다. 엔진사업부 관련돼서 질문 좀 드리겠는데요.

이번에 데이터센터용으로 처음 수주를 좀 받으셨는데, 생각해 봤을 때 엔진 부분 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, 예 두 가지 질문드리겠습니다. 감사합니다.

I have two questions about your engine business. The first question is your engine segment has landed its inaugural order for data center applications.

Then 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, 엔진기계사업부에서 답변드리겠습니다. 당사는 힘센엔진 생산 능력을 지금

400만 마력, 한 3 GW 정도 거의 생산 캐파를 가지고 있고, 현재 생산 능력으로는 지금 현재 상용 또는 발전 물량을 고려했을 때 지금 높은 가동률을 기록하고 있습니다. 그리고 뭐 저희 그룹사 내에 있는 수주한 선박에 대해서도 엔진 납품을 계속 공급을 해야 되기 때문에 현재 캡티브 물량 기준으로는 좀 부하가 많이 차 있는 편입니다.

근데 데이터센터형 발전용 엔진 수요 급증에 따라서 다방면으로 저희 옵션을 검토 중이고, 향후에 수주 물량을 기준으로 생산 캐파를 확충할 것을 검토할 예정입니다. 그리고

If I answer your first question, and mentioning our HiMSEN engine capacity, it's 4 million horsepower and 3 GW. Given our current capacity, we're recording quite a high utilization rate, and to keep up with our current capacity, especially for generation purposes, but we still need to supply our products to meet our captive demand as well, which means we are under quite a pressure to keep up with the demand coming from our own affiliates.

There is a surge in demand for data center applications as well. We're reviewing feasible options from diverse perspectives.

Based on the order and demand, our capacity expansion plan will be aligned with future demand orders. 어, 두 번째 질문에 대해서 답변을 드리면 현재 수주 경향으로 봤을 때는 자체 라이센스를 보유하고 있는 라이센서 위주로 어 수주가 되는 것이 맞습니다.

근데 어 국내뿐만 아니라 타국에 있는 라이센시 엔진들이 어 데이터센터형 어 그 수주에 대해서 대응을 하고 있는지 여부는 저희가 확실하게 파악을 하고 있지는 못하고 있지만 원가 경쟁력 측면에서는 고려하시는 바와 같이 라이센스 피를 내기 때문에 기존에 있는 라이센서들이 어 가격 경쟁력 우위는 있다고 보셔서 저희는 일단은 그 점에서 뭐 선점 효과를 누리고 있다고 보시면 되겠습니다. Given the current order-winning trend, it's true that the market is shifting towards licensor companies, not just in Korea, but overseas.

In fact, 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 this sense, our company is also better positioned than others in this market. 어, 캐파 증설 관련해서는 어 저희들이 다각도로 검토 중에 있습니다.

그렇지만 이게 공시 사항이기 때문에 향후 확정이 되면 그때 다시 말씀드리도록 하겠습니다. 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.

다음으로 질문해 주실 분은 신한투자증권의 이동헌 님입니다.

2030년까지 납품하는 걸로 계약 공시가 나와 있는데, 이걸 좀 당길 수 있는 여지가 있는지가 궁금합니다. 두 번째는 그 이 시장을 보고 최근에 이제 열려 가는 거 같아서 감이 잘 없는데요.

대략적으로 지금 뭐 클라이언트들의 분위기가 어떤지, 그리고 들어가는 이 6,271억 계약한 공시에 대한 뭐 스펙 같은 게 공개 가능한 수준에서 말씀을 부탁드립니다. 대략 뭐 이게 10 MW인지 20 MW인지, 주발전 용도로 쓰이는 건지, 뭐 연계해서 그 뭐 하는 게 어떤 건지 전반적인 사안들이 궁금합니다.

감사합니다.

I have two questions about your engine business. I know that if you are to expand your capacity, of course, you need to make disclosure about it.

My question is about the difficulty of your capacity expansion. If you are to expand your capacities, how much difficult would that be?

That's my first question. Also, according to your disclosure, your supply plan is scheduled through 2030, and 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 when you look at your customers? We know that you made a disclosure with a specific contract value about your data center contract, and I'm wondering whether you can elaborate on this very contract.

For instance, the amount of megawatts to be sold and whether it's going to be for power generation and other aligned matters about this very contract. 네, 첫 번째 질문에 대해서 답변드리겠습니다.

앞서 말씀드린 대로 엔진기계사업부는 한

3 GW 정도의 매년 생산 실적을 가지고 있기 때문에 국내의 서플라이 체인, 그리고 저희 엔진기계사업부만의 타사 대비 강점인 일관생산체제로 주요 기자재를 내재화 생산을 하고 있습니다. 그래서 생산 캐파를 증가를 하는 부분에 대해서는 크게 뭐 조립공장과 주요 기자재로 나눌 수 있겠지만 조립공장을 캐파를 키우는 거는 물론 이제 저희가 이제 고민을 또 하고는 있겠지만 크게 어려울 거는 없을 것 같습니다.

그리고 주요 기자재에 대해서도 저희가 국내 서플라이 체인과 또 좋은 긴밀한 관계를 갖고 있기 때문에 같이 손잡고 한다고 하면 특별한 어려운 점은 없을 것 같습니다. If

I answer your first question, in our engine and machinery segment, our production performance would be around 3 GW. We have a very well-established supply chain in Korea, and we have an integrated production system, which is one of our strengths, and also we have internalized necessary equipment and parts as well.

If we are to expand our capacity, we can think of two pillars: assembly plant and parts 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 chain in Korea and we have very good relationships with our suppliers, it won't be that much difficult in securing necessary equipment. 두 번째 질문은 엔진 발전 담당하고 있는 박종국 상무가 답변드리겠습니다.

최근에 데이터센터 시장은 뭐 여러 기사에서 보시다시피 성장은 분명히 하고 있고 많은 전력을 필요로 하고 있습니다. 그래서 저희 쪽도 지속적으로 인콰이어리 받고 있고요.

기존의 그리드 라인 연결이 계속 지연되면서 온사이트 발전 그리고 엔진 수요도 중장기적으로 성장할 것으로 전망을 하고 있습니다. 그리고 첫 번째 질문에 포함된

2030년도 납기를 당겨 달라고 하는 내용에 대해서는 지금 그쪽에서도 이 발전소 건설을 하고 있기 때문에 그 시기에 순차적으로 맞춰서 28년, 29년, 30년으로 저희가 분할 납품으로 계약이 돼 있습니다. 그리고 이번에 계약한 우리 공사에 대해서 스펙을 조금 공유해 달라고 하셨는데, 저희가 이번에 수주한 건 660 MW고 총 30대입니다.

엔진 모델은 16H54GV라는 모델이고, 그 한 엔진당 출력은 약 22 MW입니다. 11개씩 총 3개 사이트에 나눠서 배치되고, 저희가 공급하는 공급 범위는 엔진, 발전기 그리고 컨트롤 그리고 현장 설치, 시운전, 감리까지입니다.

상세한 사양은 뭐 저희 엔진에 나와 있는 스펙과 같다고 보시면 되겠고, 특별한 사양은 없고, 대신 미국에서 요구하는 이제 에미션 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 continue to see relevant need and demand and expectations from our clients, but still we have an issue with connecting with conventional grid, which means we're going to see a growing demand for on-site installation and generation as well as engine installations.

About the contract with the 2030 set as a delivery year, our customer also has a power plant construction schedule, and in alignment with that very schedule, we'll be also splitting our supplies in 2028, '29, and in '30. It is aligned in that way.

As to the detailed specifications of this construction, it's going to be 660 MW and 30 generations, I would say, and also per engine, the output would be 22 MW. There is going to be 11 installations across the three different sites, and the scope of this contract would be engine, power generation, relevant control, installation, and necessary audit as well.

For details about this contract, we have already publicly available data, and because of customer requirements from the United States, we have certifications to achieve, including UL certifications. 감사합니다.

다음으로 질문해 주실 분은 메리츠증권의 배기연 님입니다.

EPC를 턴키로 받는다든지 이런 그 사업 기회에 대해서 좀 어떻게 보시는지 답변 부탁드리겠습니다. 감사합니다.

The first question is about your investments in India. Can you give us any updates about your investment plans targeting India?

As President Lee Jae-myung toured around India last month, and 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 direction, for instance, in making investments in India? My second question is about floating data center.

You have a competitor in this sector, and according to news last year and recently, that competitor is really advancing into this specific area. 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?

예, 먼저 인도 조선소 관련된 얘기, 질문에 대해서 답변드리겠습니다. 이번 국빈 방문에 그룹 회장님께서 수행을 하셔 갖고 어 인도 쪽의 주요 인사들을 다시 만남을 하고, 어 타밀나두주의 그린필드 조선소 건설에 대해서 재차 그 지원을 확인을 받았습니다.

현재 저희 그룹 내부에서는 그 그린필드 조선소 건설을 위한 피저빌리티 스터디 진행 중에 있고요. 어 인도 측 지원은 여전히 확실하지만 구체적으로 몇 척의 상선을 발주하겠다 이런 내용까지는 아니고, 저희가 그린필드 조선소를 설립을 하게 된다면은 인도 내부의 자체 수요용으로 발주를 여러 척수 맞춰서 하겠다는 얘기는 확실히 확답을 받았습니다.

이상입니다. If I answer your first question about our potential shipyard operation in India, when President Lee Jae-myung visited India, our group chairman also accompanied him and met key figures, key opinion leaders in India, and 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, but there's no concrete and detailed commitment about how much commercial vessels the Indian government would order from our side.

If a greenfield shipyard is to be established, it's going to be meeting the domestic internal demand of India across multiple vessel types. 잠깐만요, 잠깐만요.

제 두 번째 답변 드리게... 드릴게요, 잠시만요.

예, 플로팅 데이터센터 관련해서 말씀드리겠습니다. 뭐 상선은 뭐 기술력, 또 엔지니어링 역량 측면에서는 플로팅 데이터센터를 수행할 수 있는 역량이 충분히 있습니다.

타사와 좀 비교를 해서 한다고 하면 플로팅 데이터뿐만 아니라 플로팅 데이터센터를 운영하기 위한 파워쉽을 운영을 해야 되는데, 파워쉽은 앞서 말씀드린 우리 힘센 대출력 엔진 기반으로 파워를 공급을 할 수 있는 기반이 마련되어 있기 때문에 타 경쟁사 대비해서는 경쟁력이 있다고 말씀드리겠습니다. 그리고

HD마린솔루션 실적 컨퍼런스 콜에서도 언급되었던 바와 같이 신조 및 개조 등 다양한 방법 등에 대해서 제안되고 있고, 현재로는 사실은 매우 초기 단계의 인콰이어리 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. Yes, we have a competitor, but not just in establishing floating data centers, we also need power ships to operate this floating data centers.

With that, we have our own HiMSEN engine, which can pave the way for operating those power ships. We're sure that we have competitive edge over our competitor in this sense.

As was mentioned in the earnings call of Hyundai Marine Solution, there could be variety of ways that we can present to our customers, including newbuild and retrofit. This market is still in its nascent stage, but we believe we can witness growth over the medium to long term in this market.

예, 다음 질문 받겠습니다. 다음으로 질문해 주실 분은 iM증권의 변용진 님입니다.

You have an engine business under Hyundai Heavy Industries, and also you have Hyundai Marine Engine, and it seems like Hyundai Marine Engine's profitability is remaining rather flat around 25%. Based on profitability, is it correct or safe to say that Hyundai Heavy Industries engine operations would be having around 29% profitability?

Is it possible that profitability level can go up further? 네, 일단 이 부분에서도 예, 지금 아시겠지만 마린엔진은 거의 25% OP 마진이 나오고 있습니다.

상당히 높은 마진이라고 생각하시면 될 것 같고, 추가적으로 여전히 가동률이 상대적으로 현대중공업 엔진사업부보다는 조금 낮은 편이에요. 그래서 추가적인 어떤 가격 상승, 그다음에 또 한 가지 변수가 환율이죠.

예, 이런 것들이 같이 맞물린다 그러면 수익성 개선이 조금은 더 있을 수도 있다고 보여집니다. 그리고 현대중공업 엔진사업부 같은 경우도 지금 DF 엔진 비중이 계속 올라가고 있는 상황이고, 그리고 뭐 양쪽 다 마찬가지지만 엔진 가격 상승이 계속 이루어지고 있는 상황이기 때문에 환율 조건만 좀 더 잘 맞아 준다 그러면 수익성 개선은 충분히 더 이루어질 수 있다.

예, 이렇게 판단이 됩니다. Hyundai Marine Engine's OPM, operating profit margin, is around 25%, and this is quite high already.

Hyundai Marine Engine's utilization rate is lower compared to Hyundai Heavy Industries engine operations. With further price increases and favorable foreign exchange conditions, we believe there is room for further profitability improvement.

If you 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.

예, 그리고 지금 데이터센터용 엔진이 2028년부터 이제 매출이 발생을 하게 될 텐데요. 이 부분이까지 매출이 계속 이제 발생을 하게 되면 수익성이 좀 더 개선되지 않을까 예 그렇게 말씀드릴 수 있겠습니다.

Also I'd like to note that the engine for data center applications and their 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, 어 저희들 시간 좀 늦게 출발했기 때문에 지금까지 좀 끌었는데요. 시간을 좀 더 어 길게 했는데, 정말 마지막으로 질문 한 가지만 받고 예 마치도록 하겠습니다.

For any final question or burning question, we know that we started late than usual, we have already given you some more time. 마지막으로 질문해 주실 분은 삼성증권의 한영수 님입니다.

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 delayed, or is it the case that these projects are taking place in a location that is not affected by the ongoing war in Iran? 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? 예, 해양에너지 부문 김남웅 책임 매니저입니다.

질문에 대해 답변드리겠습니다. 현재 당 부문에서 참여 중인 해양 입찰 공사는 중동 지역 중 UAE, 그리고 사우디아라비아, 쿠웨이트 등의 걸쳐 여러 지역에 나뉘어 있습니다.

보통 해양 공사 입찰 평가 기간의 경우 약 한 3개월에서 6개월, 또는 그 이상 소요되는 경우도 더러 있습니다. 현재 진행 중인 그 전쟁의 상황으로 소폭 지연의 영향이 있을 수도 있으나, 1분기에 저희가 가격 입찰서를 제출했고, 아직은 일반적인 입찰 평가 기간 중에 있다고 보시면 되겠습니다.

현지 분위기도 저희가 고객사와 긴밀히 연락을 취하고 있는데, 큰 폭의 지연은 있지 않을 걸로 그렇게 보시면 되겠습니다.

As to your first question, if you look at the tenders that we're currently participating, they are spread across the UAE, Saudi Arabia, Kuwait, and other countries. It normally takes 3 to 6 months or even more if you look at offshore construction tenders.

Because of the war in Iran, maybe there could be slight delays, but we have already submitted our prices and bids in Q1 already. The overall process is going on as usual and we're closely contacting our potential customers in the Middle East and we don't believe there will be any big and significant delays in this sense.

예, 그 두 번째 질문 주셨던 특수선 쪽 그 수주 관련된 상황 답변드리도록 하겠습니다. 첫 번째로는 뭐 지난 언론에 공개된 것처럼 태국 해군 호위함에 대해서 지난 4월 말에 제안서를 제출을 했고요.

그게 아마 가장 빠르게 조금 소식이 전해질 것으로 예상을 하고 있습니다. 그 밖에도 이제 필리핀 그 차기 호위함이나 말레이시아의 이제 다목적 지원함 등도 좀 이 동남아 국가 대상으로 해서 여러 가지 지금 입찰 관련된 프로세스가 진행 중이고, 그 프로젝트들도 연이어서 이제 소식이 전해질 것으로 그렇게 기대를 하고 있습니다.

그 밖에도 이제 뭐 특정 국가를 좀 말씀드리기는 어렵지만 굉장히 그 대륙별로 넓게 남미, 뭐 유럽 할 것 없이 여러 프로젝트들이 지금 동시에 좀 진행을 하고 있고요. 일단은 뭐 앞서 말씀드린 것처럼 제일 빨리 진행될 프로젝트는 아마 태국 쪽이 제일 빠르게 진행되고 있는 것으로 이해를 해 주시면 될 것 같습니다.

감사합니다. If I answer your second question, I think the most immediate and welcome news would be coming from Thailand because we have submitted our proposal in April for the frigate project in that country.

Elsewhere, in the Philippines, we also will be participating in next-generation frigate project in the Philippines as well as multi-purpose support vessel in Malaysia. Across southeastern countries, bidding processes are ongoing, and so we will be hearing news about these potential projects.

We cannot mention any specific country names, but across continents, we're working across Latin America and Europe, and there are projects ongoing concurrently. 네, 저희들 마지막 질문 Q&A까지 마치고요.

저희들이 선박, 해양, 뭐 엔진, 그리고 군함까지 모두 너무 바쁘게 저희들 사업을 영위해가고 있습니다. 예, 글로벌 시장이 혼란스러우면 혼란스러울수록 더 강하고 더 바쁜 기업이 될 것 같습니다.

예, 이상 2026년 1분기 한국조선해양 연결 경영 실적 컨퍼런스 콜을 마치도록 하겠습니다. 감사합니다.

As our business presence spans wide of areas: shipbuilding, offshore, engines, and even naval vessels. As the global market is increasingly complex and disrupted, I believe we would emerge even stronger and we would be even busier amidst such uncertain market conditions.

With this, we'd like to conclude our Q1 2026 earnings presentation. Thank you very much.