With Shipbuilding Orders Down 40%, Hyundai Heavy Will Not Meet 2012 Targets

Hyundai Heavy industries

SEOUL–Hyundai Heavy Industries Co. (009540.SE), the world’s largest shipbuilder by sales, on Thursday posted a 35% slump in third-quarter operating profit as a sharp fall in orders in the wake of the financial crisis put a dent in profits.

Analysts say a downward trend in operating profit is likely to continue through the fourth quarter as most high-end ship orders received before the financial crisis have already been delivered.

The company received $13.1 billion worth of orders only in the January-September period owing to the world-wide economic slowdown, down 40% from a year earlier. It had targeted $30.552 billion in orders this year.

Hyundai Heavy won’t achieve its annual order target owing to the world-wide economic slowdown, Lee Jae-won, an analyst at Tongyang Securities, said.

Tongyang Securities expects the company to finish the year with orders of $22.8 billion.

Consolidated operating profit for the three months ended Sept. 30 plunged to 593.9 billion won ($538 million) from KRW915.4 billion, the company said in a statement.

Sales were up 0.8% on year to KRW13.199 trillion from KRW13.094 trillion.

Third-quarter net profit rose 30% to KRW729.5 billion from KRW562.6 billion on one-time gains, the company said.

In July, Hyundai Heavy sold a 1.45% stake in Hyundai Motor Co. (005380.SE) valued at KRW746.4 billion.

Kyong-Ae Choi, (c) 2012 Dow Jones & Company