Thanks to orders for high-value-added vessels such as LNG carriers and the increase in vessel leasing and fuel bunkering businesses, Samsung Heavy Industries achieved an operating profit of 50.27 billion won (approx. US$38.67 million) in 2024. This year, Samsung Heavy Industries is expected to achieve an annual order target of US$9.8 billion through shuttle tankers, LNG carriers and FLNG units, and is expected to continue to achieve year-on-year growth in operating income and operating profit.
According to the data from the Electronic Disclosure System (DART) of the Financial Supervisory Service of South Korea, in 2024, Samsung Heavy Industries achieved an operating revenue of 9.9 trillion won (about US $7.615 billion), up 23.6 percent year-on-year, and operating profit of 50.27 billion won, up 115.4 percent year-on-year. The year-on-year growth in operating revenue and operating profit was attributable to orders for high value-added vessels, attributable to LNG carriers and ultra-large container vessels.
In addition, Samsung Heavy Industries has included vessel leasing and vessel bunkering in its business goals in March 2024 to diversify its revenue model, and this move is expected to help the company cope with the increase in long-term contracts for LNG carriers and expand its potential to enter the existing shipyard-based ‘LNG bunkering’ market.
A Samsung Heavy Industries official said, “The acquisition of assets through investment execution will generate some income once the lease contract is signed. With the increase in orders for vessels such as LNG carriers, the company plans to operate a multi-purpose commissioning support vessel designed to provide commissioning fuel for vessels under construction and store excess LNG afterwards.”
Not only that, the cost savings and restructuring effects brought about by streamlining the shipyard business will also help improve Samsung Heavy Industries’ performance. Right-of-use assets increased significantly, from 174.4 billion won to 259.2 billion won, an increase of 48.6%, while the reduction of right-of-use assets due to contract changes and lease terminations decreased by 40.99% year-on-year to 7.5 billion won. Depreciation of tangible assets increased by 7.07% to 185.6 billion won.
Meanwhile, South Korean media reported that Samsung Heavy Industries’ LNG carrier business is expected to benefit from U.S. President Trump’s crackdown on China’s shipbuilding industry and other policies during Trump’s second-term administration.
The reason for this is that the resumption of export approvals to non-free trade agreement (FTA) countries/regions is expected to increase new final investment decisions (FIDs), which will raise vessel order prices. The renewal of old vessels will have a positive impact on the newbuilding market due to the implementation of international environmental regulations and the subsequent increase in the number of ship dismantling.
In addition, demand for FLNG is expected to continue to grow this year.
An official from NH Investment & Securities stated: “Samsung Heavy Industries is expected to achieve its annual order target of $9.8 billion in the first half of this year, driven by orders for shuttle tankers, LNG carriers, and FLNGs. Leveraging its experience in delivering ice-class shuttle tankers, the company has the potential to secure orders for ice-class shuttle tankers currently under discussion. It is highly likely that Samsung Heavy Industries will win orders for two FLNGs within the year.” The institution forecasts that Samsung Heavy Industries’ revenue for the first quarter of this year will reach 2.4 trillion KRW, with an operating profit of 136.9 billion KRW, representing year-on-year growth of 4.1% and 75.8%, respectively.
On a related note, financial institution FN Guide expects Samsung Heavy Industries’ annual operating income and operating profit to grow year-on-year, reaching KRW 10.925 trillion, KRW 12.399 trillion, and KRW 12.918 trillion from 2025 to 2027, respectively.
As of March 18, Samsung Heavy Industries has received 12 new vessel orders worth about US$1.9 billion so far this year, achieving about 19% of its annual order target of US$9.8 billion. By ship type, it includes one LNG carrier, two ultra-large ethane carriers, and nine shuttle tankers.