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| KT Submarine's submarine cable-laying vessel / Courtesy of LS Cable & Systems |
By Kim Hyun-bin
KT Submarine (KTS) saw its first-quarter operating profit reach 1.5 billion won ($1.12 million), marking a turnaround from a 1.9 billion won operating loss the previous quarter, the company said Tuesday.
"The decrease in fixed expenses due to improved asset efficiency was a significant factor," KTS officials said.
However, sales declined by 23 percent compared to the same period last year.
"We faced the impact of a temporary slowdown in the submarine communication construction market last year," a company spokesperson said. "Once the recently awarded projects are fully implemented, we anticipate a significant improvement in annual performance."
In the first quarter alone, KTS secured substantial contracts worth approximately 38.4 billion won for large-scale submarine cable laying and burying, accounting for 90 percent of the previous year's sales.
KTS has been investing proactively in ship equipment modernization and the acquisition of new submarine power installation lines since last year to expand its submarine business. It is also strengthening collaboration with LS Cable & System.
LS Cable's submarine business has experienced rapid growth, including winning a 2 trillion won contract for a high-voltage direct current (HVDC) cable connecting offshore wind farms in Europe's North Sea. The total value of large-scale submarine projects awarded since last year, including the European project, amounts to approximately 3 trillion won.
LS Cable has also expressed its intention to bolster its construction business through KTS. On April 3, the company exercised a call option to acquire 6,295,558 KTS shares for approximately 44.9 billion won. Upon completing the stock acquisition on July 3, LS Cable's stake in KTS will increase from the existing 19.43 percent to 43.68 percent, making it the largest shareholder.
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