Hyundai Heavy says 1Q profit, sales rise
SEOUL, South Korea—Hyundai Heavy Industries Co., the world's biggest shipbuilder, said Monday that first-quarter net profit rose 19 percent from the same period last year amid record sales.
Hyundai Heavy Industries earned 442.30 billion won (US$444 million; euro284 million) in the three months ended March 31, the company said in a statement to South Korea's financial regulator. It posted net profit of 371 billion won in the same quarter a year ago.
Sales rose 18 percent to 4.35 trillion won (US$4.36 billion; euro2.79 billion) from 3.68 trillion won a year earlier.
Kim Mi-ri, a company spokeswoman, said that in addition to record revenue in the quarter, Hyundai Heavy also had an all-time high operating profit of 639.60 billion won (US$642 million; euro410 million), up 59 percent from the same period last year.
Hyundai Heavy delivered 22 ships during the quarter valued at a total US$2.4 billion (euro1.5 billion), Kim said. Most of those orders were received in 2005 when ship prices were higher, she said.
The company delivered 13 container ships, four liquid petroleum gas, or LPG, carriers, three liquid natural gas, or LNG, carriers and two oil tankers during the quarter, Kim said.
Hyundai Heavy received orders for 40 ships in the first quarter valued at US$5.9 billion (euro3.8 billion), Kim said. As of March 31, it had an order backlog of 363 ships valued at US$34.3 billion (euro21.9 billion).
The company has reported stellar earnings in recent years, benefiting from increased international trade -- especially involving fast-growing China and its thirst for natural resources.
"As there is more trade, people are ordering more ships," said Chung Sung-yop, an analyst at Daiwa Securities SMBC in Seoul.
Shipbuilding accounts for about 50 percent of Hyundai Heavy's business. The company also designs and builds offshore facilities such as oil rigs and pipelines. It also manufactures marine terminals, power facilities, desalination plants, construction equipment and industrial robots.
Kim, the spokeswoman, said that Hyundai Heavy recorded strong sales of construction equipment in China, South America, Russia and the Middle East, resulting in that division's operating profit more than doubling in the quarter.
Ulsan, South Korea-based Hyundai Heavy, established in 1972, rose to become the world's largest shipbuilder in just three decades. South Korean companies dominate the industry.
Shares in Hyundai Heavy, which released its earnings results just after the stock market closed, fell 1.1 percent to 376,000 won (US$377; euro242).
