Samsung Heavy Industries’ Q3 loss widens on one-off costs

SEOUL– Major South Korean shipbuilder Samsung Heavy Industries Co. said Friday that its third-quarter loss widened from a year earlier due to one-off costs and fewer working days.

Samsung Heavy Industries posted a net loss of 201.6 billion won (US$141.8 million) in the July-September period, after being 123.8 billion won in the red a year earlier.

Sales fell 5.7 percent on-year to 1.4 trillion won, with operating loss growing to 167.9 billion won from a loss of 110.2 billion won a year earlier. The shipyard has posted operating losses for 20 quarters on end.

Samsung Heavy Industries, the shipbuilding arm of South Korea’s top conglomerate Samsung Group, attributed the wider third-quarter loss mainly to one-off and fixed costs.

The company set aside 80 billion won in payments resulting from a belated wage deal with the labor union, as well as some 88 billion won in fixed costs.

The shipbuilder said fewer working days resulting from summer vacations and Chuseok, or the Korean fall harvest celebration, were also responsible

Despite the growing loss, Samsung Heavy, the world’s third-largest shipbuilder by order backlog, appears to be on course to achieve its yearly order goal for the second consecutive year.

The shipyard has clinched $7.4 billion worth of orders for 339 ships so far this year, or 84 percent of its yearly target.

A company official said the shipyard will likely bag nearly $3 billion worth of orders for liquefied natural gas carriers and offshore plants for the remainder of the year.

Shares in Samsung Heavy Industries closed 1.93 percent up at 5,290 won on the Seoul bourse Friday, outperforming the 0.89 percent drop in the benchmark Korea Composite Stock Price Index (KOSPI).

Source: Yonhap News Agency

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