Samsung C&T posts Q2 2019 earnings

Samsung C&T Corporation posted Q2 earnings of KRW 7.972tn in revenue and KRW 221bn in operating profit, marking QoQ growth backed by improved profitability at the Engineering & Construction Group (E&C Group), the Resort Group’s businesses entering the peak season, etc.

– Revenue and operating profit grew by KRW 615bn (8.4%↑) and KRW 106bn (110.5%↑), respectively, from Q1 2019

* Q1 2019 revenue KRW 7.357tn, operating profit KRW 105bn

– In Year-on-Year (YoY) terms, revenue increased slightly while operating profit marked a decline, as a result of a drop in commodities prices and the base effect of Engineering & Construction Group’s strong performance in 2018

Despite growing uncertainty in the business environment, the company will continue to pursue profitability through enhancing product/service competitiveness and maintaining emphasis on efficiency and financial soundness.

– With new orders in 1H at KRW 2.5tn, the company will strive to achieve its annual target of KRW 11.7tn through winning target projects in core and adjacent markets and expanding into new products

– In 2H, Samsung C&T will seek improved performance through efforts such as strengthened management of construction projects amid an anticipated recovery of commodities prices/demand and the peak season of the Resort business

Overall Performance

Revenue: KRW 7.972tn, YoY KRW growth by KRW 44bn (0.6%↑), from KRW 7.928tn in Q2 2018

Operating Profit: KRW 221bn, YoY KRW drop by 157bn (41.5%↓), from KRW 378bn in Q2 2018

Revenue grew on the back of strong performance in plant projects (E&C Group) and an increase in natural resources trading volume (T&I Group).

Operating profit marked a YoY decline as the T&I Group was affected by a drop in commodities prices, in addition to the base effect of the E&C Group’s strong performance in 2018.

The Fashion Group, meanwhile, recorded YoY growth as a result of efforts to enhance operational efficiency.

Engineering & Construction Group

Revenue: KRW 3.152tn, YoY increase by KRW 19bn (0.6%↑) from KRW 3.133tn

Operating Profit: KRW 158bn, YoY decrease by KRW 85bn (35.0%↓) from KRW 243bn

YoY, revenue grew slightly, while operating profit fell due to the base effect of the strong performance in 2018.

Trading & Investment Group

Revenue: KRW 3.565tn, YoY increase by KRW +18bn (0.5%↑) from KRW 3.547tn

Operating Profit: KRW 27bn, YoY decrease by KRW 30bn (52.6%↓) from KRW 57bn

YoY, revenue increased slightly, while operating profit dropped due to unfavorable trade conditions, e.g. falling commodities prices, etc.

Fashion Group

Revenue: KRW 416bn, maintained at previous year’s level (KRW 416bn)

Operating Profit: KRW 10bn, YoY increase by KRW 4bn (66.7%↑) from KRW 6bn

YoY, revenue was similar to that of Q2 2018, while operating profit grew as a result of improved efficiency.

Resort Group

Revenue: KRW 761bn, YoY growth by KRW 54bn (7.6%↑) from KRW 707bn

Operating Profit: KRW 53bn, YoY drop by KRW 7bn (11.7%↓) from KRW 60bn

YoY, revenue marked growth from strong performance in the Leisure business and expansion of sales for food distribution, while operating profit fell due to an increase in costs.

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