Samsung Heavy Industries Reports Operating Profit of 502.7 Billion KRW Last Year, Up 115% Year-on-Year

Samsung Heavy Industries announced on the 5th that its operating profit for last year was tentatively estimated at 502.7 billion KRW, a 115% increase compared to the previous year. Sales increased by 24% to 9.9031 trillion KRW.

원본보기 아이콘

The operating profit and sales achieved by Samsung Heavy Industries are 26% and 2% higher, respectively, than the targets of 400 billion KRW and 9.7 trillion KRW set at the beginning of last year. The company explained, "This is the result of the reduction in fixed costs due to increased sales and the revenue recognition of ships ordered during the period of rising ship prices."

However, pre-tax profit recorded a loss of 315.5 billion KRW due to a change in the accounting treatment of forward exchange contracts related to the Russia project. A Samsung Heavy Industries representative stated, "The company had applied the 'fair value hedge accounting' method to the forward exchange contracts for the Russia project, but after reviewing the impact of the unilateral contract cancellation notice from the client, it decided to discontinue hedge accounting and reflect the valuation loss on the related forward exchange contracts."

Samsung Heavy Industries expects that with the full-scale construction of FLNG this year, the improvement in sales and profitability will be even greater, setting targets of 10.5 trillion KRW in sales and 630 billion KRW in operating profit. A Samsung Heavy Industries representative said, "We have set a target of 9.8 billion USD in shipbuilding and offshore orders, 33% higher than last year's performance of 7.3 billion USD, and plan to continue a selective order strategy focused on profitability based on a stable order backlog."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.