South Korean Shipbuilders’ Off-Shore Debts
Beleaguered South Korean shipbuilders's total liabilities as of the end of last year for their 34 overseas affiliated companies have reached 5.3584 trillion won (US$4.65 billion), up 28.7% compared to five years ago, reports BusinessKorea.
The debts of those of Daewoo Shipbuilding & Marine Engineering increased by 43.2% to 2.1842 trillion won (US$1.89 billion) during the period while the amount of those of Samsung Heavy Industries soared from 431.2 billion won (US$374.9 million) to 1.2633 trillion won (US$1.09 billion).
The amount was 1.9109 trillion won (US$1.66 billion) for Hyundai Heavy Industries’ although they reduced theirs by 13.4% over the five years.
The overseas affiliated companies recorded an average debt ratio of 548.9% at the end of 2015 whereas it had been 266.1% at the end of 2010 and 200% is generally regarded as an appropriate level in the industry.
Besides, 16 out of the 34 companies posted a debt ratio of more than 200% or were those with impaired capital.
Meanwhile, worst-ever slump may stretch into next year, as demand for new ships is expected to remain low amid still slackened oil prices and slumping global trade, prodding local shipyards to cut their output capacity, industry sources said.
According to a report compiled by the Export-Import Bank of Korea (Korea Eximbank), a total of 2.32 million compensated gross tons worth of new shipbuilding orders were placed around the globe during the first quarter of the year, down 71 percent from a year earlier. By value, new ship orders also fell 63 percent on-year to reach $6.51 billion.
