SEOUL– Samsung Heavy Industries Co. said Friday that it narrowed its net loss in the second quarter from a year earlier thanks to increased sales.
Its net loss reached 447.4 billion won (US$388.9 million) in the second quarter from 704.3 billion won a year ago, the company said in a regulatory filing.
Its operating loss was also reduced to 437.9 billion won in the April-June period, compared with an operating loss of 707.7 billion won a year earlier.
The operating loss was 82 percent higher than the average estimate, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
Sales rose 1.4 percent to 1.71 trillion won.
“A rise in sales in the second quarter came from increased construction of ships that were ordered last year,” Samsung Heavy said in an emailed statement.
The second-quarter operating loss mainly stemmed from its allowances for expected construction loss of 372 billion won to be caused by a rise in prices of steel plates in the second half, the company said.
Local steelmakers plan to raise prices of steel plates in the second half due to increased prices of raw materials, including iron ore and coal, Samsung Heavy Industries said.
The shipbuilder’s net debt reached 2.8 trillion won at the end of the second quarter, down 600 billion won from 3.4 trillion won a year earlier on the back of cash that the company received in advance for the construction of some LNG carriers and container carriers, the company said.
Samsung Heavy plans to start trading its new shares at the local main stock market starting Aug.10 after completing its capital reduction.
The capital reduction will decrease the company’s capital stock to 630 billion won from 3.15 trillion and improve its financial health by increasing capital surplus, Samsung Heavy said.
So far in July, the shipbuilder has attained 74 percent of its annual order target, winning orders worth $6.7 billion won.
Along with the report of second-quarter results, Samsung Heavy said its board of directors decided to set up an ESG committee under the board at the meeting held earlier in the day.
The committee of ESG, which is short for environmental, social and governance, is meant to support environmental protection, social justice and ethical management practices of the shipbuilder.
Source: Yonhap News Agency