SEOUL: South Korea’s big three shipbuilders logged the largest-ever loss in the second quarter due to losses from the delayed building of offshore plants, regulatory filings showed here the other day.
A combined operating loss of Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding and Marine Engineering reached 4.75 trillion won (4.1 billion U.S. dollars) in the three months through June 30.
Daewoo Shipbuilding, the No.3 shipbuilding company, posted the largest operating loss of 3.03 trillion won in the quarter, trailed by the No.2 shipbuilder Samsung Heavy with 1.55 trillion won. The No.1 Hyundai Heavy posted a loss of 171 billion won.
Daewoo’s second-quarter loss was the worst-ever earnings, which a single shipbuilder posted, in the history of the country’ s shipbuilding industry.
Daewoo Shipbuilding recorded an operating loss of 3.08 trillion won in the first half of this year, nearing to a loss of 3.25 trillion won tallied by Hyundai Heavy in the whole year of 2014.
The worst-ever losses by South Korean shipbuilders stemmed from the delayed building and the changed design in offshore plants, orders of which the big three received at a lower price.
Before the earnings announcement, speculations spread among stock investors that former executives of Daewoo Shipbuilding postponed the booking of losses on its balance sheet in order to keep their positions.
Daewoo’s 3.03 trillion-won in operating loss jumped from a loss of 43.3 billion won in the first quarter. It recorded an operating profit of 102.7 billion won in the second quarter of last year.
The shipbuilder’s revenue tumbled 63.1 percent from a year earlier to 1.66 trillion won in the second quarter, and it posted a net loss of 2.48 trillion won.
During the first half, Daewoo’s revenue declined 23.4 percent from a year earlier to 6.14 trillion won, logging 3.08 trillion won in operating loss and 2.56 trillion won in net loss.
The company forecast that its earnings would be normalized from the second half as profits of high value-added LNG carries, orders of which were received last year, will be reflected.
Samsung Heavy’s revenue plunged 44.8 percent from a year earlier to 1.44 trillion won in the second quarter. The shipbuilder registered 1.55 trillion won in operating loss and 1. 16 trillion won in net loss during the quarter.
Samsung Heavy said that all risks were already reflected in the second-quarter earnings, adding that it has a very low possibility for the company to book additional losses in the future. The shipbuilder expected a turn into the black in earnings during the third and fourth quarters.
Hyundai Heavy logged an operating loss of 192.4 billion won in the second quarter on revenue of 11.95 trillion won. It was relatively optimistic compared with its rivals as the shipbuilder already posted an operating loss of 1.1 trillion won in the second quarter of last year.
Hyundai Mipo Dockyard, a merchant vessel builder and an affiliate of Hyundai Heavy, logged an operating profit of 15.5 billion won in the second quarter, turning into the black compared with the same period of last year.
Hyundai Mipo’s revenue increased 34.8 percent from a year earlier to 1.21 trillion won in the second quarter.
