Samsung Heavy 3Q Net Falls 53% On Steel Costs, Low-End Ships

Samsung Heavy Industries Co. on Tuesday posted a 53% plunge in third-quarter net profit due to higher steel prices and decreased sales of more lucrative ships.

Net profit for the three months ended Sept. 30 totaled KRW132 billion ($118 million), down sharply from KRW279.4 billion a year earlier, the world's second-largest shipbuilder by orders said in a statement.
Operating profit declined 42% to KRW217.1 billion KRW375 billion, while sales rose 7.3% to KRW3.408 trillion from KRW3.175 trillion.
The company said its orders totaled $14.8 billion at the end of September, buoyed by strong demand for drill ships and liquefied natural gas carriers, meaning it will beat its annual target of $11.5 billion worth of orders this year.
Samsung Heavy recorded $9.7 billion worth of new orders in 2010.
"Building orders for low-priced ships taken right after the 2008 financial crisis cut into the quarterly profits," the company said in the statement.
Ship orders generally aren't reflected appear on the bottom line until years after they are taken because it takes years to build a ship.