Samsung Heavy Q2 net falls 10 pct on costs, declining orders

(ATTN: CHANGES headline, lead; UPDATES share price in 4th para; ADDS more details in
last three paras)
SEOUL, July 28 (Yonhap) -- Samsung Heavy Industries Co., South Korea's No. 2
shipbuilder, said Tuesday its second-quarter earnings sank 10 percent from a year
earlier mainly due to higher steel prices and falling new orders.


Net profit reached 151 billion won (US$121 million) in the April-June period,
compared with 168 billion won a year earlier, the company said in a regulatory
filing.
Sales, however, rose 25 percent to 3.23 trillion won over the cited period, and
operating income gained 19 percent to 229 billion won.
Shares of Samsung Heavy were trading at 30,900 won on the Seoul bourse as of
10:34 a.m., up 0.82 percent.
Samsung Heavy and local rivals such as Hyundai Heavy Industries Co. saw their
shipbuilding orders shrink this year due to the global economic slump.
Local shipyards have sold debt to raise funds amid falling orders, which
increased borrowing costs. Samsung Heavy sold 700 billion won worth of debts in
March.
But Samsung Heavy said it is expecting orders for offshore facilities to increase
in the second half of the year and that steel prices will likely remain low for
the time being, helping improve its profitability.
The company said its operating profit margin rose to 7.1 percent in the second
quarter, up from 5.6 percent in the first three months of this year.
sam@yna.co.kr
(END)