Hyundai Q3 profit rises

Hyundai Heavy Industries (HHI) achieved a net profit in the third quarter because of more profitable orders and one-off gains from an accounting change. Earnings at South Korean shipbuilders, which dominate the global market, are set to improve due to falling steel plate prices and a more stable South Korean won.

But analysts are concerned vessel prices could weaken in the coming quarters due to sluggish global trading volumes and the growing competition from Chinese shipyards.

Hyundai posted a net profit of 167.2 billion won ($159.8 million) in the third quarter to Sept. 30, compared with a 33.1 billion won net loss a year earlier and following a 35.5 billion won profit in the previous quarter.

Third-quarter sales rose to 2.57 trillion won from 2.26 trillion won a year earlier and 2.55 trillion won in the April-June quarter. Hyundai earned 127.6 billion won in special income in October after a court order to adjust retirement payment-linked provisions, the company said.

Hyundai and other local shipbuilders, including the world’s No.2 Daewoo Shipbuilding and Marine Engineering, have been helped by winning lucrative new orders since 2004, after suffering poor earnings in the first half mainly because of low-priced orders from 2003.

Hyundai, which has an order backlog to keep it busy for the next three years, received orders worth $13.23 billion between January and September, up 23% from the same period last year. Of the total, shipbuilding orders accounted for $7.97 billion, up 13% from a year earlier.

Shares in Hyundai jumped 49% in the third quarter lifted by the improving outlook, outperforming a 21% rise in the benchmark KOSPI index.