KT Submarine under LS Group turns profitable in second quarter

KT Submarine Co.’s cable laying barge GL 2030. [Courtesy of LS Group]

KT Submarine Co., a recent addition to the LS Group, has reported its largest-ever operating profit, experiencing a turnaround to profitability, which led to a substantial surge in its share price on Monday.

KT Submarine achieved sales of 17.9 billion won ($14 million) and operating profits of 5.5 billion won in the second quarter of this year. Sales were up 60 percent on-year. Additionally, the successful transition to operating profitability marks a significant improvement, as the company incurred an operating loss of 1.8 billion won in the quarter of the previous year, the company said in a disclosure to the Korea Exchange.

According to the bourse, the share price of KT Submarine rose by 12.04 percent on Monday from the previous trading day, with the trading volume up significantly by 11 times. The share price of KT Submarine has surged by 90 percent since the beginning of this year.

Last October, LS Cable & System Ltd. became the largest shareholder of KT Submarine after participating in a third-party allotment of new shares. In April this year, LS Cable & System signed a call option agreement for additional share acquisition. With the final payment scheduled for next month, LS Cable & System’s stake will rise to 45.69 percent.

Following LS Cable & System’s stake acquisition, KT Submarine has been expanding its business for undersea power cables, fostering cooperation between the two.

“In the first half of this year alone, we achieved new orders worth approximately 60 billion won, which is over 140 percent of last year’s sales,” said KT Submarine Chief Executive Officer Lee Seung-yong. “With projects already secured for the second half of this year, we are expecting record-breaking annual performance by the end of this year.”

The company’s new orders are expected to gain momentum from the second quarter of this year.

“The 58 billion won order for the 99MW Jeonnam offshore wind farm, which was won by the company in June, is likely to be recognized as a major portion of next year’s revenue,” said Meritz Securities analyst Moon Kyeong-won.