Samsung Heavy Industries Reports 4Q Operating Loss of 215 Billion KRW, Down 31% YoY

"This Year's Order Target is 8.4 Billion Dollars"

▲Samsung Heavy Industries Geoje Shipyard 3 Dock Panorama

[Asia Economy Reporter Yu Je-hoon] Samsung Heavy Industries announced on the 3rd that it recorded an operating loss of 215 billion KRW in the fourth quarter of last year. This is a 31% decrease compared to the same period last year.

According to Samsung Heavy Industries, last year's sales amounted to 2.1572 trillion KRW, a 58% increase compared to the same period last year. Despite the increase in sales, the reason for the deficit was attributed to ▲ foreign exchange losses on drillship inventory revaluation (69 billion KRW) due to currency depreciation ▲ interest expense provisions and related costs due to arbitration of the Stena drilling rig ▲ provisions for the Ichthys project in Australia (67 billion KRW), among others.

Accordingly, Samsung Heavy Industries' total sales for last year were tentatively estimated at 7.3497 trillion KRW, an increase of about 2 trillion KRW compared to the previous year, and the operating loss was 616.6 billion KRW.

A Samsung Heavy Industries official explained, "The 2019 deficit included approximately 340 billion KRW of book valuation losses such as inventory fair value decline and forward exchange contract valuation losses, which did not involve actual cash outflow. The 69 billion KRW inventory valuation loss in the fourth quarter was offset by gains from forward exchange contracts in non-operating sections, so it had no impact on profit and loss," adding, "Excluding one-time costs related to drillships (drilling rigs), the ordinary operating loss in the fourth quarter was about 45 billion KRW."

Meanwhile, Samsung Heavy Industries also disclosed its business outlook on the same day, projecting sales of 7.6 trillion KRW and an order target of 8.4 billion USD for this year. Specifically, the order target is 5.9 billion USD for shipbuilding and 2.5 billion USD for offshore, which is an 18% increase compared to last year's 7.1 billion USD.

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