Evaluation Losses Sink Samsung Heavy to More Q1 Deficit

Samsung Heavy Industries Co. announced that its net losses in the first quarter increased to 227 billion won from a loss of 102.6 billion last year due to evaluation losses.

The won's weakness against the U.S. dollar triggered the evaluation losses from its forward exchange contracts for the reselling of five drillships.

Operating losses also increased to 47.8 billion won from a loss of 33.3 billion the year before, up 14.5 billion won from last year but down 78 percent from the preceding quarter.

The operating losses were due to ships the company built for low-price contracts, the temporary closure of Samsung Heavy Industries China was due to COVID-19, and an increase in fixed costs due to a lesser number of offshore plants projects.

However, sales jumped 25.3 percent on-year to reach 1.82 trillion won.

Early this month, Samsung Heavy was awarded a 253.6 billion-won deal from a Bermudan shipper to build two huge crude oil carriers.

The deal pushed Samsung Heavy's orders by $5 billion for five vessels, which is 5.9 percent of its annual target of $8.4 billion.