Samsung E&A (028050.KS) posted solid third-quarter results as revenue from large-scale projects began to be recognized in earnings. With nine-month orders and operating profit both surpassing full-year targets, the company sharply raised its guidance for the year and announced a special shareholder return in the form of a 780 billion won share buyback.
Samsung E&A said in a preliminary earnings filing on the 22nd that third-quarter revenue reached 2.91 trillion won and operating profit 500.6 billion won ($348 million). The figures were up 45.8% and 183.6%, respectively, from a year earlier. For the first nine months, revenue was 7.79 trillion won and operating profit 961.9 billion won. The company attributed the strong results to "revenue from large chemical plant projects and advanced industry projects being recognized in full, along with significant gains in productivity and profitability through rigorous project cost management and technology-driven innovation in project execution, including artificial intelligence, digital transformation and robotics."
New orders totaled 9.4 trillion won in the third quarter, bringing the nine-month total to 17.1 trillion won. The order backlog stood at 27.2 trillion won at the end of the third quarter, equivalent to about three years of work based on last year's revenue of 9 trillion won. The order figures were lifted by a $3.5 billion fertilizer project in Saudi Arabia that the company won on a sole-source basis from SABIC Agri-Nutrients in September. In a revised earnings outlook filing, the company raised its full-year order target to 19 trillion won from 12 trillion won and its operating profit forecast to 1.4 trillion won from 800 billion won.
The strong results are also accelerating efforts to boost shareholder value. Samsung E&A's board met the same day and approved the purchase of about 780 billion won in treasury shares over three months, from the 23rd of this month through Jan. 22 next year. Of that amount, 690 billion won will be cancelled after acquisition to enhance shareholder value, while the remaining 90 billion won will be used for employee bonuses and other purposes. The company said the decision was a special shareholder return reflecting its outperformance of management targets and market demands, adding that the current period — when design efficiency gains and optimization of costs, schedules and systems are achievable — is the right time for shareholder returns.
"Backed by an ample order backlog, we will continue to deliver quality orders and stable earnings through rigorous project management and differentiated execution based on innovative technology," a Samsung E&A official said. "We will solidify the foundation for mid- to long-term sustainable growth through balanced expansion across all divisions, including chemical plants, advanced industries and new energy."