Samsung Heavy Industries announced on September 29 that its operating profit in the third quarter of this year increased by 42% compared to the same period last year. The total operating profit of the three major shipbuilders in South Korea, including HD Korea Shipbuilding & Marine Engineering and Hanwha Ocean, reached 2.2713 trillion South Korean won. This increase was due to continued revenue from high-value-added ships, including liquefied natural gas (LNG) carriers that were contracted at higher prices in the past.
Operating Profit and Revenue of Samsung Heavy Industries
Samsung Heavy Industries recorded revenue of 3.1504 trillion South Korean won and operating profit of 338.4 billion South Korean won in the third quarter, reflecting annual increases of 19.6% and 42.1%, respectively. Despite a 2.5% decrease in revenue compared to the previous quarter due to fewer working days caused by summer holidays and Chuseok holidays, operating profit increased by 4.1%. The operating profit margin reached 10.7%, and cumulative operating profit for the first quarter of the year amounted to 936.5 billion South Korean won.
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Results of HD Korea and Hanwha Ocean
HD Korea Shipbuilding & Marine Engineering, which announced its results on September 28, saw a 37.3% annual increase in operating profit to 1.4472 trillion South Korean won in the third quarter. The cumulative operating profit of this company for the year reached 4.4483 trillion South Korean won, surpassing the annual operating profit record of 3.9045 trillion South Korean won set in just the first quarter of the year. Hanwha Ocean also reported on September 27 that its operating profit for the third quarter increased by 67.6% to 485.7 billion South Korean won.
However, cost pressures still exist in the shipbuilding industry. HD Korea Shipbuilding & Marine Engineering faced a reduction of 70 billion South Korean won in its operating profit due to currency depreciation and 50 billion won due to fewer working days in the third quarter. Additional costs arising from wage negotiations and collective agreements were also reflected in its results. As a result, the operating profit of this company decreased by about 12% compared to the previous quarter. Samsung Heavy Industries also experienced a similar revenue decline due to fewer working days.
Labor-management disputes have approached final resolution stages. On October 27, workers and management at HD Hyundai Heavy Industries reached a final agreement on wages and collective agreements after 11 minor strikes and a high-altitude protest. Workers and management at Hanwha Ocean also temporarily agreed on a base wage increase of 140,000 South Korean won on the same day. Samsung Heavy Industries also concluded its wage negotiations last month.
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