Samsung Heavy Industries, Operating Profit Over 100 Billion Won for the First Time in 10 Years...121% Increase YoY

Annual Target Sales of 9.7 Trillion KRW and Operating Profit of 400 Billion KRW on Track

LNG carrier built by Samsung Heavy Industries. Photo by Samsung Heavy Industries

Samsung Heavy Industries announced its preliminary business results for the second quarter of this year on the 25th, reporting sales of 2.532 trillion KRW and an operating profit of 130.7 billion KRW.

This represents an 8% increase in sales and a 68% increase in operating profit compared to the previous first quarter. Recording an operating profit exceeding 100 billion KRW on a quarterly basis is the first achievement in about 10 years since the fourth quarter of 2014. Operating profit also increased by 121.9% compared to the same period last year.

The increase in sales is largely due to the recognition of revenue from FLNG (Floating Liquefied Natural Gas production facilities), which began production in April, becoming fully reflected from the second quarter. The operating profit increase is attributed to regular factors such as ▲reduction in fixed costs due to increased sales ▲decrease in the proportion of ships reflecting construction loss provisions ▲increase in sales of high-profit marine segments, as well as one-time factors including the settlement of change orders for marine projects.

The company expects the sales structure by ship type to remain similar to that of the second quarter in the second half of the year. It is steadily progressing toward the annual sales target of 9.7 trillion KRW and operating profit target of 400 billion KRW set at the beginning of the year.

So far this year, Samsung Heavy Industries has secured orders for a total of 22 vessels (4.9 billion USD), achieving 51% of the annual order target of 9.7 billion USD. Negotiations are underway for multiple projects including eco-friendly container ships, LNG carriers, and FLNG.

A Samsung Heavy Industries representative stated, "The construction proportion of our main ship types, LNG carriers and FLNG, is expanding, and with a stable order backlog secured, we will continue a selective order strategy focused on profitability."