Samsung Engineering Secures Projects Worth Total 4 Trillion KRW This Month in Saudi Arabia and Algeria

[Asia Economy Reporter Ki-min Lee] Samsung Engineering has secured projects worth a total of 4 trillion won this month alone in Saudi Arabia and Algeria.

Samsung Engineering announced on the 28th that on the 23rd, it signed a contract with Saudi Arabia's state-owned oil company Aramco for the 'Hawiyah Unayzah Gas Storage Project,' valued at approximately 2.1 trillion won (about 1.85 billion USD).

Earlier, in November last year, Samsung Engineering received a letter of intent for the project and signed and executed a preliminary business contract.

This project involves constructing gas injection facilities with a capacity of 1.5 billion cubic feet (ft3) per day and gas regeneration facilities with a capacity of 2 billion cubic feet per day in the Hawiyah gas field area, located 260 km east of Riyadh, the capital of Saudi Arabia. Samsung Engineering will carry out all EPC (Engineering, Procurement, and Construction) processes. The project is scheduled for completion in 2023.

On the 8th of this month, Samsung Engineering also secured a 1.9 trillion won contract for the Hassi Messaoud refinery plant in Algeria. The Hassi Messaoud refinery project is a mega refinery project worth a total of 4.3 trillion won commissioned by Algeria's largest state-owned oil company Sonatrach, and it will be jointly executed with Spain's T?cnicas Reunidas.

With this, Samsung Engineering has secured orders worth 4 trillion won overseas this month alone, covering Saudi Arabia and Algeria, securing more than two-thirds of its annual sales in 2018 ahead of schedule.

Riding on the strong order momentum, Samsung Engineering is also maintaining a solid performance. It recorded a cumulative operating profit of 318.8 billion won up to the third quarter of last year, surpassing the annual target of 300 billion won. The selective orders of high-quality projects have been fully reflected in the performance, leading to a recovery in the chemical sector's performance and the continued stable profit structure in the industrial environment sector.

Due to solid performance and improved financial stability, credit ratings have also been upgraded consecutively. In December, Korea Ratings (A-/Stable, new) and Korea Investors Service (BBB+/Stable → BBB+/Positive) upgraded Samsung Engineering's credit rating. Samsung Engineering's total borrowings, which reached 2.754 trillion won in the third quarter of 2015, have decreased to 212.4 billion won in four years. Considering the cash and cash equivalents held amounting to 661.9 billion won, the company has shifted to a net cash position (net borrowings of -449.5 billion won). As of the third quarter of 2019, the debt ratio was recorded at 248%, significantly down from over 500% in 2015.

A Samsung Engineering official stated, “Based on accumulated experience and differentiated technological capabilities, we have continued the order rally since the beginning of the year,” adding, “This year, we plan to strengthen our fundamentals and maintain a stable business structure through high-quality orders and thorough business management focused on profitability.”

This content was produced with the assistance of AI translation services.