April 25, 2024
Industrials
Korean shipbuilders recover from downturn last year
[THE INVESTOR] South Korea’s top three shipbuilders -- Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries -- seem to have recovered last year from their worst-ever performance the previous year, industry sources said on Jan. 23.
But their improved earnings may have come from their relentless efforts to cut costs through workforce reduction and asset sales, they said.
According to FnGuide, an industry tracker, HHI, the No. 1 shipbuilder, is expected to have logged an operating income of 1.64 trillion won on sales of 38.55 trillion won last year.
In 2015, the shipyard suffered an operating loss of 1.54 trillion won on sales of 46.23 trillion won, hit by increased costs stemming from a delay in the construction of ships and order cancellations.
HHI, which also suffered a record loss of 3.25 trillion won in 2014, is expected to have benefited from an equity gain with its oil-refining unit, Hyundai Oilbank, and its cost-cutting measures, the sources said.
Samsung Heavy is forecast to have racked up an operating loss of 116 billion won on sales of 10.55 trillion won in 2016, compared with an operating loss of 1.5 trillion won and sales of 9.71 trillion won the previous year.
Samsung Heavy’s estimated narrowed loss is forecast to have stemmed from shaking off its potential losses related to its offshore facility projects from its balance sheet.
DSME is expected to have logged an operating loss of 528 billion won on sales of 13.12 trillion won last year, according to Daishin Securities, which compares with an operating loss of 2.94 trillion won and sales of 15 trillion won the previous year.
But the industry sources said DSME’s operating loss may be bigger than expected due to tightened accounting. In the first nine months of the year, the shipyard suffered an accumulated loss of 590 billion won.
(theinvestor@heraldcorp.com)
But their improved earnings may have come from their relentless efforts to cut costs through workforce reduction and asset sales, they said.
According to FnGuide, an industry tracker, HHI, the No. 1 shipbuilder, is expected to have logged an operating income of 1.64 trillion won on sales of 38.55 trillion won last year.
In 2015, the shipyard suffered an operating loss of 1.54 trillion won on sales of 46.23 trillion won, hit by increased costs stemming from a delay in the construction of ships and order cancellations.
HHI, which also suffered a record loss of 3.25 trillion won in 2014, is expected to have benefited from an equity gain with its oil-refining unit, Hyundai Oilbank, and its cost-cutting measures, the sources said.
Samsung Heavy is forecast to have racked up an operating loss of 116 billion won on sales of 10.55 trillion won in 2016, compared with an operating loss of 1.5 trillion won and sales of 9.71 trillion won the previous year.
Samsung Heavy’s estimated narrowed loss is forecast to have stemmed from shaking off its potential losses related to its offshore facility projects from its balance sheet.
DSME is expected to have logged an operating loss of 528 billion won on sales of 13.12 trillion won last year, according to Daishin Securities, which compares with an operating loss of 2.94 trillion won and sales of 15 trillion won the previous year.
But the industry sources said DSME’s operating loss may be bigger than expected due to tightened accounting. In the first nine months of the year, the shipyard suffered an accumulated loss of 590 billion won.
(theinvestor@heraldcorp.com)
