April 26, 2024

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South Korea’s major shipyards are expected to report an improvement in their earnings for the first quarter of the year, with Daewoo Shipbuilding & Marine Engineering likely to continue to deliver a decent profit, market data showed on April 3.

Local brokerage houses are estimating that sales for top player Hyundai Heavy Industries will reach some 3.3 trillion won ($2.9 billion) for the January-March period, up over 10 percent from a year earlier.

The world’s largest shipyard is forecast to swing to the black from a year earlier as well, they predicted.

“In the case of HHI, its new orders were smaller than what we have expected in the first quarter,” said Rhyu Seung-woo, an analyst at SK Securities. “But we expect new orders to increase from this month.”

Samsung Heavy Industries is also predicted to see its operating loss narrow in the first quarter from a year earlier, although it is widely expected to continue to have suffered a loss during the just-ended quarter.

The two firms are likely to have benefited from a fall in their fixed costs amid increased new orders for ships such as LNG carriers, they said.

DSME, meanwhile, may report decent earnings for the first quarter on the back of new orders and cost-cutting measures.

The shipyard might have racked up an operating income of some 100 billion won in the January-March period, with its sales estimated at roughly 2 trillion won.

For the year, local shipyards are expecting a sharp turnaround on the back of more orders.

By Ram Garikipati and newswires (ram@heraldcorp.com)