DSME 2018 net profit halves on loss from asset sale

Ships are under construction at the Daewoo Shipbuilding & Marine Engineering Co. (DSME) shipyard in Geoje, South Korea, on Wednesday, April 22, 2009. Daewoo Shipbuilding & Marine Engineering Co. is the world's third-largest shipyard. Photographer: Seokyong Lee/Bloomberg News

Daewoo Shipbuilding & Marine Engineering Co. (DSME), one of S. Korea’s top three shipyards, said Thursday that its net profit halved in 2018 from a year earlier due to a loss from asset sale.

Net profit reached 320 billion won (US$282 million) last year, compared with a profit of 645 billion won a year earlier, the company said in a regulatory filing.

Operating income, however, surged 40 percent on-year to reach 1.03 trillion won as set-aside reserves, against potential losses, were reclassified as operating profits, while sales dipped 13 percent to 9.64 trillion won, it said.

The figure marks the second straight year that the shipyard has posted a profit.

Daewoo Shipbuilding clinched deals valued at $6.81 billion last year, surpassing its annual order goal of $6.6 billion. Samsung Heavy bagged $6.3 billion worth of orders last year, lower than its initial target of $8.2 billion.

Last week, Hyundai Heavy Industries, the world’s largest shipbuilder by sales, signed a formal deal with South Korea’s state-run Korea Development Bank to buy its smaller local rival, DSME.

Under the deal estimated at over 2 trillion won, KDB will hand over its 55.7-percent stake in Daewoo Shipbuilding to an entity to be set up later by Hyundai Heavy, in return for 1.25 trillion won worth of stocks to be sold later by the entity.

Hyundai Heavy will also chip in a total of 2.5 trillion won in the entity, which will be used to repay Daewoo Shipbuilding’s debts.

Source: Yonhap

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