Hyundai Heavy Industries, the world's largest shipbuilder, said Thursday that its third-quarter profit rose 21 percent as it charged more to build oil tankers, cargo ships and liquefied natural gas carriers.Net income rose to 201.9 billion won, or $210 million, from 167.2 billion won a year earlier, the shipbuilder said in a regulatory filing. Sales increased 22 percent to 3.14 trillion won.Hyundai Heavy, Daewoo Shipbuilding & Marine Engineering and other Asian yards are benefiting from increased investment in fuel production and transportation, as demand for oil increases worldwide. South Korean shipyards have a backlog of orders that will keep them busy for more than three years."New orders and firm prices will continue for the next two to three years," said Kwak Tai Ho, an analyst at Kyobo Investment Trust Management. "We expect steady growth in earnings for the shipbuilder."Operating profit, or sales minus expenses and the cost of goods sold, surged nearly fourfold to 226.7 billion won from 59.3 billion won a year earlier.
Hyundai Heavy and other South Korean shipyards won a record $12.4 billion worth of orders in the third quarter. Orders received by dockyards in South Korea, home to the world's largest yards, more than doubled from a year earlier to 5.97 million compensated gross tons in the three months to September, the Ministry of Commerce, Industry and Energy said last week.As shipping lines order larger tankers and container ships, the Panama Canal is planning to double capacity to handle the bigger vessels. The $5.3 billion expansion plan will allow ships carrying as many as 12,000 containers to use the waterway, cutting traveling time between Asia and the eastern United States.Hyundai Heavy won an order last month to build eight container vessels, each of which will be able to carry 11,400 20-foot standard containers, making them among the largest container ships. The Korean shipyard will deliver the vessels between mid-2009 and June 2010.
Daewoo Shipbuilding & Marine Engineering, the world's second-largest shipyard, raised its order forecast this year after winning contracts for three vessels worth $430 million. One contract is for a ship that can carry LNG to TMT of Taiwan by August 2010 and the other is for two vessels to transport liquefied petroleum gas to Brave Maritime in Greece by January 2010."Booming demand for tankers and offshore drilling platforms will keep the industry growing at least until the first half of next year," said Cho Yong Joon, the head of research at Shinyoung Securities. The profit figure "beat my expectation," said Cho, who rates the company "buy."