Samsung Heavy Industries faces double-digit drop in profits in 1Q

Samsung Heavy Industries (President and CEO In-Sik Roh) saw operating profit drop by double-digit figures in the first quarter of 2012.

Operating profits for 1Q decreased by 14.2% to KRW 336.9 billion from KRW 392.5 billion the previous year.

Net income also was down by 16.1% to KRW 252.7 billion compared with KRW 301.1 billion in the same period of 2011. On the other hand, the company’s revenue was slightly up by 0.7% to KRW 3.5389 trillion from KRW 3.5158 trillion in 2011.

According to a company statement, profitability slowed down - the cash cow ships, ordered in 2007 and 2008, have declined in importance for sales while lower-profitable vessels ordered after 2009 has been given greater weight in sales.

Meanwhile, SHI’s results improved compared with the 4th quarter of 2011. It's revenue, operating profit and net profit climbed by 7.1%, 49.8% and 43.2%, or KRW 3.3037 trillion, KRW 195.6 billion and 176.5 billion, respectively.

A representative at SHI explained, “Our profitability will further slowdown in the second quarter, but the annual operating profit to sales ratio will continue at 6~7%.” < 김보람 기자 brkim@ksg.co.kr >