Samsung Heavy Industries (010140) Investor presentation summary

Business performance and financial highlights

• Revenue in 2Q 2024 reached KRW 2.5T, up 30% YoY and 8% QoQ, with operating profit at KRW 131B and a margin of 5.2%.

• Revenue for 2024 is projected at KRW 9.7T (17% YoY growth), with earnings expected at KRW 400B.

• New order target for 2024 is $9.7B, with $4.9B already secured by August, mainly from LNG carriers.

• Order backlog as of August 2024 stands at $32.2B, with LNG carriers comprising 63% of the backlog.

• Total assets at end-June 2024 were KRW 16.8T, with total equity at KRW 3.9T and borrowings at KRW 3.6T.

Market outlook and industry trends

• LNG carrier demand is rising, with over 70 new LNGCs and 40 VLGC/VLACs expected annually, driven by global LNG demand and replacement needs.

• Containership new orders are expected to slow due to recent large deliveries, but eco-friendly replacement demand will drive future orders.

• Tanker market is improving, with 37% of the fleet over 15 years old, creating strong replacement demand due to environmental regulations.

• Offshore facility investment is set to expand, especially in FLNG projects, to meet future oil and LNG demand.

• The company holds a top-tier global market share in LNG carriers, FSRUs, and drillships.

Eco-friendly technologies and innovation

• International regulations are driving demand for eco-friendly ships, with IMO targeting net-zero GHG emissions by 2050.

• Advanced LNG technology enables dual-fuel vessels to cut CO2 emissions by 30% compared to conventional fuels.

• Waste heat recovery, CO2 capture, and optimized ship shapes are being implemented to further reduce emissions and improve efficiency.

• Methanol and ammonia-fueled vessels, fuel cell ships, and floating nuclear power plants are under development for future decarbonization.

• Smart ship and autonomous ship technologies are advancing, enabling remote operation, predictive maintenance, and reduced OPEX.