Samsung Heavy Industries Reports Operating Loss of 437.9 Billion KRW in Q2

[Asia Economy Reporter Kim Hyewon] Samsung Heavy Industries announced on the 30th that its operating loss for the second quarter amounted to 437.9 billion KRW. This represents a 38.1% decrease in the deficit compared to the same period last year (-707.7 billion KRW) and a 14% reduction compared to the previous quarter (-506.8 billion KRW).

During the same period, sales reached 1.7155 trillion KRW, an increase of 1.4% compared to the same period last year. Compared to the previous quarter, sales increased by 9%.

The operating loss was mainly due to the conservative reflection of expected cost increases (372 billion KRW) from steel price hikes in the second half as construction loss provisions, the company explained.

At the end of the second quarter, Samsung Heavy Industries’ net borrowings stood at 2.8 trillion KRW, improving by 600 billion KRW from the end of the first quarter (3.4 trillion KRW). This improvement was due to advance payments for Arctic LNG carriers and Evergreen container ships.

Samsung Heavy Industries is currently undergoing a par value reduction and a free capital reduction, with new shares scheduled to be listed on the 10th of next month. Once the reduction is completed, the capital stock will decrease from 3.1505 trillion KRW to 630.1 billion KRW, and the increase in capital surplus is expected to improve the financial structure.

A Samsung Heavy Industries official stated, "As of July, we have secured orders worth 6.7 billion USD, which is 74% of this year’s order target, and considering the projects planned for the second half, achieving the target should be smooth," adding, "Plans to improve the financial structure, including preparations for a paid-in capital increase, are also progressing without any setbacks."