Samsung Heavy Q1 net profit falls on steel costs

Samsung Heavy Industries Co, the world's second-largest shipyard, reported profit in the first quarter declined 12 per cent to the smallest amount in two years because of higher steel-plate prices. Net income fell to 101.8 billion won (S$118 million) from 115.8 billion won a year earlier, the Seoul-based company said in a regulatory filing yesterday.
Profit fell short of the 149 billion won median estimate in a Bloomberg survey of 14 analysts. Sales gained 15 per cent to 2.78 trillion won.
Shipyards in South Korea, the world's biggest shipbuilding nation, are using more steel plates that go into making ship hulls as they work through record orders won for five years since 2003. The price of steel plates almost doubled last year.
Operating profit, or sales minus the cost of goods sold and administrative expenses, fell 30 per cent to 155.6 billion won in Q1, narrowing margins to 5.6 per cent from 9.3 per cent a year earlier.
Samsung Heavy gained as much as 1.6 per cent to 32,150 won and traded at 31,700 won as of 2:15pm in Seoul.
The stock has climbed 40 per cent this year, compared with a 26 per cent advance in South Korea's Kospi index.