Over 600 million yuan! Samsung Heavy Industries' Q1 operating profit increased by 58% year-on-year

On April 24, Samsung Heavy Industries released its first-quarter earnings report for this year, achieving operating revenue of 249.43 billion South Korean won (approximately US\$1.736 billion, 12.66 billion RMB), a year-on-year increase of 6.2%; operating profit of 123.1 billion South Korean won (approximately US\$85.67 million, 625 million RMB), a year-on-year increase of 58%; and net profit of 90.1 billion South Korean won (approximately US\$62.7 million, 457 million RMB), a year-on-year increase of 1055.1%.

Samsung Heavy Industries stated that with the increase in operating revenue and reduction in fixed costs, and the commencement of construction on new vessels contracted during the period of rising ship prices, the company's first-quarter performance has seen significant improvement. In particular, with the official commencement of construction of the floating liquefied natural gas production facility (FLNG) this year, the improvement in operating revenue and operating profit is expected to further expand.

In the first quarter of last year, Samsung Heavy Industries achieved operating revenue of 234.78 billion South Korean won (approximately US\$1.706 billion), a year-on-year increase of 46.3%; operating profit of 77.9 billion South Korean won (approximately US\$57 million, approximately 413 million RMB), a year-on-year increase of 297.4%, with an operating profit margin of 3.3%. This year's first quarter saw the company's operating profit margin reach 4.9%, an increase of 1.6 percentage points.

For the whole of last year, Samsung Heavy Industries achieved operating revenue of 990.31 billion South Korean won (approximately US\$730 million, 51.9 billion RMB based on the annual average exchange rate), a year-on-year increase of 23.6%; and operating profit of 502.7 billion South Korean won (approximately US\$370 million, 2.636 billion RMB), a significant year-on-year increase of 115.5%. This also marks two consecutive years of annual profitability for Samsung Heavy Industries since 2023.

Samsung Heavy Industries stated that since the beginning of the year, the company has received orders for 16 new vessels totaling US\$2.2 billion (approximately 13.88 billion RMB), completing 22% of its annual order target of US\$9.8 billion. This includes 1 LNG carrier, 9 shuttle tankers, 2 very large ethane carriers (VLEC), and 4 crude oil tankers.

Samsung Heavy Industries aims to achieve an operating profit margin of 6% this year through "aggressive" order-taking activities. In 2023, the company's operating profit margin was 2.9%, increasing to 5.1% in 2024.

A Samsung Heavy Industries representative said: “The company's target values for 2025, proposed at the beginning of the year, are: operating revenue of 10.5 trillion South Korean won (approximately US\$7.27 billion, 52.9 billion RMB), and operating profit of 630 billion South Korean won (approximately US\$436 million, 3.172 billion RMB). Progress is currently proceeding smoothly. The company plans to build on its stable backlog of orders, focusing on profitable LNG carriers and FLNG projects for selective order-taking, creating a portfolio of various high-quality vessel types to lay the foundation for sustainable growth and maximize long-term returns.”