Korean Shipyards Look Bullish
South Korea's major shipyards are estimated to have racked up solid profit during the second quarter of the year, aided by the increased delivery of ships, cost-cutting measures and a rise in new orders, Yonhap reported citing industry sources.
Another report said that Korean yards have clinched the most new shipbuilding orders in the first half of the year, with their combined tally more than doubling from a year earlier. The trend appears bullish for ship building in the country.
The local shipyards have bagged orders worth a combined 2.56 million compensated gross tons in the January-June period, accounting for 34 percent of the total orders placed around the globe, according to the data compiled by industry tracker Clarkson Research.
According to the data compiled by Yonhap Infomax, the financial news and information arm of Yonhap News Agency, Hyundai Heavy Industries (HHI) is expected to have logged an operating income of 142 billion won (US$124 million) during the April-June period, but the estimate marks a drop from the previous quarter's operating earnings of 164 billion won.
HHI and its affiliates have secured a series of new contracts, with their new orders reaching $4.2 billion to build 72 ships in the first six months of the year.
Samsung Heavy Industries Co. (SHI), another big shipbuilder here, is expected to have achieved an operating income of 51 billion won for April-June period following the previous quarter's operating income of 27.4 billion won, the data showed.
In the January-June period, SHI secured $4.8 billion worth of new orders to build 13 ships, including two offshore plants.
Troubled Daewoo Shipbuilding & Marine Engineering Co. (DSME ) is also projected to be in positive territory. In the January-March period, the shipyard chalked up an operating income of 292 billion won.
DSME clinched $770 million worth of new orders to build seven ships in the first half of the year.
South Korean shipbuilders have been under severe financial strain since the 2008 global economic crisis, which sent new orders tumbling amid a glut of vessels and tougher competition from Chinese rivals.
The country's top three shipyards suffered a combined operating loss of 8.5 trillion won in 2015. The loss was due largely to increased costs stemming from a delay in the construction of offshore facilities and an industrywide slump, with Daewoo Shipbuilding alone posting a 5.5 trillion-won loss.
