Samsung Heavy Industries (010140) Q1 2025 earnings summary

Executive summary

• Revenue for Q1 2025 was KRW 2,494.3 billion, up 6.2% year-over-year, with operating income of KRW 123.1 billion and net income of KRW 92.1 billion, reflecting improved profitability in shipbuilding and offshore segments.

• Shipbuilding and offshore accounted for 94.4% of sales, with civil engineering and construction at 5.6%.

• Gross margin improved to 9.5% from 7.0% year-over-year, driven by higher value-added vessel deliveries and cost controls.

Financial highlights

• Total assets at quarter-end were KRW 16,281.2 billion, with equity of KRW 3,808.0 billion and liabilities of KRW 12,473.2 billion.

• Cash and cash equivalents decreased to KRW 519.7 billion from KRW 956.0 billion at year-end 2024.

• Operating cash flow was negative KRW 131.1 billion, mainly due to working capital changes and increased inventories.

• R&D expenses were KRW 21.5 billion, representing 0.9% of sales.

Outlook and guidance

• The shipbuilding market is expected to see increased orders for LNG carriers and tankers in the second half of 2025, despite a slow Q1 due to global trade tensions.

• Construction sector faces continued uncertainty due to weak domestic demand and tighter financing conditions.