Published : Jan. 29, 2016 - 09:18
Samsung C&T, the construction, trading and fashion unit of Samsung Group, on Thursday reported a net profit of 2.6 trillion won ($2 billion) in 2015, despite incurring heavy losses in the fourth quarter.
The company posted a net loss of 161.7 billion won in the October-December period ― a steep decline from a net profit of 2.9 trillion won in the previous quarter ― which the company attributed to the merger between Cheil Industries and Samsung C&T to form the new holding company with the same name in September.
Samsung C&T's headquarters in southern Seoul
The operating profit for the entire year stood at 37.1 billion won, while for the fourth quarter the operating loss was 89.1 billion won
On the bright side, the company recorded revenue of 13.34 trillion won in 2015 and 7.2 trillion won in the October-December period.
The company said that quarterly losses reflected a total of 2.6 trillion won in potential losses related to projects of the former Samsung C&T ― 1.6 trillion won was attributed to the construction division, and the remaining 1 trillion won to the trading division.
“The results reflect estimated losses and contingent liabilities of 850 billion won for the Roy Hill project in Australia, and 150 billion won for the Balkhash power plant project in Kazakhstan. The results also take into account losses of 560 billion won in the value of oil projects due to the fall in oil prices, as well as 450 billion won in contingent liabilities concerning other projects,” said the company.
“By reflecting potential risks that may arise from the projects of the former Samsung C&T, the company aims to remove any uncertainties and focus on the future,” Samsung said.
Regarding the net profit for the entire year, Samsung said the results reflect the reevaluation of assets, including the biotechnology business after the merger, despite booking significant potential losses.
By Bae Ji-sook (baejisook@heraldcorp.com)