South Korean construction giants Hyundai Heavy Industries and Samsung Heavy Industries have reported contrasting financial results in the third quarter of 2021, but both are spying better times around the corner.

Hyundai said it turned to a profit in the July-to-September period, making net income of 51.4 billion won ($43.5 million) compared with a net loss of 73.8 billion won this time last year, and following a loss of 351.5 billion won in the second quarter this year.

Revenue was 1.9 trillion won, similar to the second quarter and the corresponding period last year.

However, the company's Offshore & Engineering division, which specialises in large offshore production facilities and drilling rigs, is still reporting operating losses, this time 22.1 billion won compared to 17.8 billion won this time last year.

The company said the loss was "due to negative operational leverage on sales" .

Revenue in the quarter was slightly higher at 54.2 billion won "due to differences in the remaining projects’ construction process and reflection of sales related to design in Myanmar Shwe Ph.3 [project]", Hyundai said.

The company said its offshore backlog is about $4.1 billion on a "delivery basis" comprising two fixed platforms and three floating production units.

Samsung's 2023 goal

Samsung, meanwhile, reported a net loss of 124 billion won in the July-to-September 2021 window compared with a loss of 7.3 billion won one year ago.

It recognised a one-off loss of 63 billion won for the closure of a yard in China, and recognised fixed cost burdens of 47 billion won.

Revenue of 1.5 trillion won was 11.4% less than one year ago, and 13.4% less than the second quarter.

Samsung's offshore order book is worth $6.4 billion comprising three drilling rigs and two offshore production facilities.

In terms of its outlook for the Offshore market, Samsung said it will focus on the Bonga South West floating storage, production and offloading unit in West Africa, the North Platte FPU in the Gulf of Mexico, the North Field Production Sustainability in Qatar and the Wisting FPSO in Norway.

In addition, "increasing demand for LNG is expected to lead to an expansion of FLNG projects".

Samsung has just raised 1.28 trillion won through the sale of new shares, reported the Yonhap News Agency.

The company's 250 million new shares were oversubscribed by existing shareholders and employees.

The company will use the proceeds to repay debt and sharpen its competitive edge in developing eco-friendly ships, Yonhap reported.

Samsung said in an investor presentation last month that its management is targeting a financial turnaround in 2023 by "securing competitive edge through improved financial structure and investment in tech".

"Despite increasing new orders, a turnaround in 2022 will not be realistic due to low new orders in 2020 [as a result of Covid-19]. However, from 2023 onward, the effect of new orders received in 2021 and the new measures will be in sight, leading to a turnaround if the measures are completed successfully."

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