Samsung Heavy Industries (010140) Investor presentation summary

Business performance and financial status

• Revenue for Q3 2024 reached KRW 2.3T, up 15% YoY but down 8% QoQ, with operating profit at KRW 120B and a steadily improving margin of 5.2% despite fewer working days.

• Cumulative 2024 revenue is KRW 7.2T, with full-year revenue expected to exceed KRW 9.7T and earnings projected at KRW 400B, marking two consecutive years of profit.

• New order target for 2024 is $9.7B, with $6.8B already secured by November, mainly from LNG carriers.

• Order backlog stands at $32.5B as of November 2024, with a revenue backlog of KRW 31.4T, showing consistent growth since 2020.

• Total assets at the end of September 2024 were KRW 15.1T, with total equity at KRW 3.7T and borrowings at KRW 3.8T.

Market outlook

• LNG carrier demand is expected to rise, with over 70 LNGCs and 40 VLGC/VLACS ordered annually, driven by increasing LNG and LPG demand and replacement needs due to IMO regulations.

• Containership orders are shifting toward eco-friendly replacements, with new orders expected to slow due to recent large-scale deliveries but replacement demand for older vessels remains strong.

• Tanker market is buoyed by replacement demand as 39% of the fleet is over 15 years old, with environmental regulations and geopolitical factors supporting growth.

• Offshore facility investment is set to expand, especially in FLNG projects, with several major contracts and discussions ongoing.

Eco-friendly technologies and innovation

• Strengthening international regulations, especially IMO's net-zero by 2050 target, is driving increased orders for eco-friendly ships and adoption of EEDI, EEXI, and CII standards.

• Decarbonization strategies include advanced LNG dual-fuel vessels, waste heat recovery, CO2 capture, and optimized ship shapes for improved efficiency.

• Future technologies focus on methanol and ammonia-fueled vessels, fuel cell ships, floating nuclear power plants, and smart autonomous ship systems for operational efficiency and reduced emissions.