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Hyundai Heavy Q2 profit drops but outlook positive

Hyundai Heavy Q2 profit drops but outlook positive
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First Published: Wed, Jul 20 2011. 01 32 PM IST
Updated: Wed, Jul 20 2011. 01 32 PM IST
Seoul: Hyundai Heavy Industries Co Ltd on Wednesday posted a 10% annual fall in second-quarter operating profit as non-core businesses such as electric systems weighed on sales.
The world’s largest shipbuilder has ridden a wave of strong demand for lucrative vessels such as LNG carriers and drillships so far this year.
Analysts believe order prospects for high-end vessels and offshore plants remain bright in the second half.
Its well-diversified portfolio will give Hyundai an edge over its Korean peers, analysts said.
“Order growth for ships may slow down in the second half of the year but in the fourth quarter we will see a rebound,” said Lee Jae-won, a Tong Yang Securities analyst.
Ulsan-based Hyundai, which also makes marine engines and construction equipment, reported a 677 billion won ($639 million) operating profit for the April-June quarter, missing a consensus forecast for 881 billion won from a poll by Thomson Reuters I/B/E/S.
The figure compared with a 752 billion won operating profit a year earlier. The firm in a statement attributed to the decline in profit partly to higher prices of steel plates used in shipbuilding.
Hyundai Heavy shares have slipped 11.5% over the past three months, underperforming the broader market’s 0.35% gain.
The stock was under pressure until early this month, when Hyundai said it would not bid for a controlling stake in Hynix Semiconductor amid investor concerns over a lack synergy benefits from the potential deal.
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First Published: Wed, Jul 20 2011. 01 32 PM IST
More Topics: Company results | Hyundai Heavy | Q2 | Profit | LNG |