SEOUL, Nov. 16 (Yonhap) — South Korea’s Daewoo Shipbuilding & Marine Engineering Co. said Monday that its net losses narrowed in the third quarter from a year earlier on the back of its strong operating profit.

Net losses shrank to 29.2 billion won (US$26.3 million) in the July-September period from a loss of 296.4 billion won a year earlier, the company said in an emailed statement.

Operating profit came to 33.6 billion won in the period, a turnaround from an operating loss of 256.3 billion won, while sales fell 26 percent to 1.44 trillion won.

In the January-September period, sales came in at 5.37 trillion won and operating profit came to 386 billion won. Net profit stood at 264.8 billion won.

“Despite strong operating profit, the company was in red in the third quarter as a loan of about 50 billion won to its subsidiary was wrote off in its books as a loss,” Daewoo Shipbuilding said.

The company also said its financial health has improved as its debt-to-equity ratio was lowered to 161.4 percent in the third quarter from 200.3 percent at the end of 2019.

“Weak orders this year due to COVID-19 caused order backlogs to decrease,” the company said, adding it will focus on expanding its orders to tide over a lack of orders.

Daewoo Shipbuilding rose 8.06 percent at 26,150 won on the Seoul bourse, outperforming the broader KOSPI’s 1.97 percent gain.