Hanjin Heavy notches threefold profit rise

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Hanjin Heavy notches threefold profit rise

Hanjin Heavy Industries & Construction Co., the first Korean company to export ships, said first-quarter profit almost tripled as expanding trade with China and the U.S. led to orders for container vessels at higher prices. Net income increased to 52.8 billion won ($57 million) from 18.5 billion won a year earlier, the Busan-based company said in a regulatory filing yesterday. Sales were up 53 percent to 779.4 billion won.
Hanjin Heavy joins bigger rivals, including Hyundai Heavy Industries Co., in reporting higher earnings, as it fulfills 2004 and 2005 contracts.
Shipping lines bought vessels to bring raw materials to China and take away finished goods. Prices have risen since late 2003 as Wal-Mart Stores Inc. and other retailers increased shipments from China and other Asian countries, prompting those countries to purchase more raw materials such as oil.
Profit at Hanjin Heavy was also buoyed by gains from selling a parcel of land in Incheon, the company said, without providing details on the transaction. Sales of ships accounted for 48 percent of total revenue.
Operating profit, or sales minus the cost of goods sold and administrative expenses, rose almost eightfold to 137.4 billion won in the first quarter. That brought its operating profit margin to about 17 percent of sales.
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