Hyundai Heavy Industries, the world's biggest shipbuilder reported a net profit of KRW 903 Billion, an increase of 21% from last year.
Sales rose to 16.92% KRW 6.3 Trillion won with operating profit up 10.99 % to 991.8 Billion. Hyundai Heavy's annual sales target for this year is KRW 26.9 trillion and new orders of USD 26.6 Billion
The company's operating profits were buoyed by increased sales in the shipbuilding and engine & machinery business, rebounding and construction equipment sales in the Chinese market.
The first quarter performance results were the first under which the company applied a new International Financial Reporting Standard
Hyundai Heavy Industries Co Ltd is expected to enjoy strong orders momentum, analysts said, after the company posted a forecast-beating quarterly operating profit on lucrative ship and offshore plant orders.
Hyundai was likely to benefit from growing demand for high-value products such as large-size containers, drillships and LNG carriers despite competition from Chinese peers, analysts said.
"A solid cycle for the offshore sector is coming, which should strengthen fresh order flows," said HI Investment & Securities analyst Hur Sung-duck.
The world's largest shipbuilder logged a 992 billion won ($924.2 million) operating profit for the January-March quarter, up 11 percent from 894 billion won last year.
Analysts forecast an average operating profit of 942 billion won operating profit, according to a survey by Thomson Reuters I/B/E/S.
Total revenue rose 17 percent to 6.3 trillion won.
A recent increase in the cost of steel plates is expected to crimp shipbuilder operating margins ahead. [ID: nL3E7FJ05O]
However, backed by a strong outlook for other businesses, analysts said Hyundai Heavy would be able to minimise the cost burden through its diversified portfolio, which ranges from offshore facilities to electrical equipment.
"The company's operating profit was buoyed by increased sales in its shipbuilding and engine & machinery operations, and rebounding construction equipment sales in the Chinese market," Hyundai said in a statement.
Shares in Hyundai have risen 7.8 percent over the past three months, outperforming the overall market's 4.8 percent gain. ($1 = 1073.400 Korean Won) (Reporting by Ju-min Park; Editing by Chris Lewis)
