LS Marine Solution triples operating profit in Q3 despite sales dip

LS Marine Solution sharply improved its profitability in the third quarter, more than tripling its operating profit despite a decline in sales.

The company posted consolidated sales of 73.6 billion won ($55.4 million), operating profit of 6.9 billion won and net profit of 6.2 billion won for the third quarter, it announced Wednesday.

Sales fell 4.3 percent from 77 billion won in the same period last year, but operating profit surged 235 percent from 2.1 billion won to 6.9 billion won.

Cumulative earnings for the first three quarters came to 221.9 billion won in sales and 17.2 billion won in operating profit. The cumulative operating profit set a record for any three-quarter period in the company's history.

The improvement was driven by overseas project expansion and greater process efficiency. Key contributors included a submarine cable burial project for Taiwan Power Company's offshore wind complex (TPC2) and a submarine telecommunications cable installation project in the Asia-Pacific region.

Subsidiary LS Buildwin also improved profitability by raising construction efficiency on submarine and underground cable projects in Asia and the Middle East.

The sales decline was partly attributable to a scale-up of the submarine cable-laying vessel GL2030, which kept the ship out of third-quarter projects and limited revenue growth. GL2030 is set to begin active deployment with a project in Malaysia this month and is expected to drive sales growth going forward.

LS Marine Solution currently holds a consolidated order backlog of around 820 billion won ($617 million). The company recently won a 156.9 billion won contract to build submarine cables for the Sinan Ui offshore wind project. The current backlog is roughly 3.4 times the company's full-year sales last year of 244.2 billion won.

LS Marine Solution plans to pursue a series of large-scale projects in sequence, including the Sinan Ui and Taean offshore wind developments.