SAMSUNG HEAVY'S Q2 NET FALLS 10% ON COSTS, FEWER ORDERS

Mon. July 27, 2009; Posted: 10:27 PM

SEOUL, Jul 28, 2009 (AsiaPulse via COMTEX) -- SMSHF | Quote | Chart | News | PowerRating -- Samsung Heavy Industries Co. (KSE:010140), South Korea's No. 2 shipbuilder, said Tuesday its second-quarter earnings sank 10 per cent from a year earlier mainly due to higher steel prices and falling new orders.

Net profit reached 151 billion won (US$121 million) in the April-June period, compared with 168 billion won a year earlier, the company said in a regulatory filing.

Sales, however, rose 25 per cent to 3.23 trillion won over the cited period, and operating income gained 19 per cent to 229 billion won.

Shares of Samsung Heavy were trading at 30,900 won on the Seoul bourse as of 10:34 a.m., up 0.82 per cent.

Samsung Heavy and local rivals such as Hyundai Heavy Industries Co. (KSE:009540) saw their shipbuilding orders shrink this year due to the global economic slump.

Local shipyards have sold debt to raise funds amid falling orders, which increased borrowing costs. Samsung Heavy sold 700 billion won worth of debts in March.

But Samsung Heavy said it is expecting orders for offshore facilities to increase in the second half of the year and that steel prices will likely remain low for the time being, helping improve its profitability.

The company said its operating profit margin rose to 7.1 per cent in the second quarter, up from 5.6 per cent in the first three months of this year.

(Yonhap)maz

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