SEOUL, April 10 (Yonhap) — Korea Shipbuilding & Offshore Engineering Co. (KSOE) is estimated to have posted weak earnings in the first quarter, affected by sluggish new orders clinched last year amid the pandemic, industry watchers said Saturday.

The shipbuilder is forecast to have recorded 38 billion won (US$34 million) in net income in the January-March period, falling 77 percent from 165 billion won a year ago, according to a consensus estimate of four analysts by Yonhap Infomax, the financial news arm of Yonhap News Agency.

The company is estimated to have recorded 3.76 trillion won in sales during the January-March period, down 4.75 percent from 3.94 trillion won a year ago, with operating profit probably dropping 54 percent to 563 billion won.

This photo, provided by Korea Shipbuilding & Offshore Engineering Co. on Feb. 24, 2021, shows a ConRo ship built by Hyundai Mipo Dockyard Co. in 2010. (PHOTO NOT FOR SALE) (Yonhap)

The expected weaker earnings come as the shipyard suffered decreased sales, affected by a fall in new orders last year amid the COVID-19 pandemic, analysts said.

As it usually takes seven to eight months for shipbuilders to start building vessels, sales are recognized on the financial statement with a time lag.

KSOE’s new orders fell 37.6 percent on-year to $2.7 billion in the first half of last year as the new coronavirus pandemic pounded the shipbuilding industry.

KSOE, the subholding company of Hyundai Heavy Industries Holdings Co. (HHIH) has three shipbuilding subsidiaries — Hyundai Heavy Industries Co., Hyundai Mipo Dockyard Co. and Hyundai Samho Heavy Industries Co.

KSOE bagged $5.4 billion worth of new orders in the first quarter of this year, achieving 36 percent of its annual order target of $14.9 billion.

Daeshin Securities Co., a local brokerage, said in a recent report that KSOE is not expected to see a remarkable improvement in its earnings this year despite brisk orders.

Chung Dong-ik, an analyst at KB Securities Co., said a recent hike in prices of raw materials, including steel plates, is not likely to have an impact on the company’s bottom line.

Shares of KSOE closed at 128,000 won on the Seoul bourse Friday, down 1.54 percent from the previous session.