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High ship prices push SHI profits to record levels

High ship prices push SHI profits to record levels

Seoul: The world's second-largest shipbuilder Samsung Heavy Industries revealed that profit rose 23% in the third quarter to a record as it built more vessels at higher prices, writes Bloomberg. Net income climbed to 174.2bn won ($138m) in the three months to Sept. 30 from 141.5bn won a year earlier, the Seoul-based company said in a regulatory filing today. Sales increased 16% to a record 2.6 trillion won, while operating profit climbed 20% to 142.5bn won.

Shipyards in South Korea, the world's biggest shipbuilding nation, are working to complete record orders won at higher prices with deliveries stretching into 2012. Future earnings will be boosted by softening material costs as the global financial crisis weakens demand for steel.

"The average price of vessels that are being built will increase as shipyards build more vessels bearing higher margins,'' said Lee Jae Kyu, an analyst at Mirae Asset Securities Co. in Seoul. "Earnings will be better from the fourth quarter as material costs fall.''