SEOUL-- Korea Shipbuilding & Offshore Engineering Co. (KSOE) on Wednesday said it has turned to a net loss in the second quarter of the year on increased cost stemming from a surge in prices of steel plates.

Its net loss came to 722.1 billion won (US$626.7 million), compared with a net profit of 400 million won a year earlier, KSOE said in a regulatory filing.

The company reported its sales posted 3.79 trillion won, down 3.3 percent from a year ago.

Operating loss amounted to 897.3 billion won in the April-June period, compared with an operating profit of 92.9 billion won a year ago. The operating loss was three times more than the average estimate, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

"The main reason for the huge net and operating losses was due to increased cost from a surge in prices of steel plates," KSOE said in a separate emailed statement.

The allowances for expected construction loss worth 896 billion won ($776 million) have been reflected in the financial statement of the second quarter, the company said.

But KSOE said it expects its earnings to improve in the second half of the year, as the increased prices of steel plates are predicted to lead to a rise in ship prices and the company's shipbuilding subsidiaries have secured enough order backlogs.

KSOE is a holding company of three leading shipbuilders -- Hyundai Heavy Industries Co., Hyundai Mipo Dockyard Co. and Hyundai Samho Heavy Industries Co.

KSOE exceeded its 2021 target order of $14.9 billion in the middle of the month, having won new orders worth $15.2 billion in total so far this year and secured orders to make it busy for two years and a half.

Source: Yonhap News Agency