DSME estimated to have additional 1 tln-won loss

dsme

Daewoo Shipbuilding & Marine Engineering Co., South Korea’s No. 2 shipbuilder, is estimated to hold an additional 1 trillion won (US$861 million) in losses from overseas units that have not yet been reflected in its balance sheet, industry sources said Sunday.

In the second quarter, the shipyard posted a record 2.39 trillion won in net deficit, a sharp turnaround from a 76 billion-won profit during the same period a year earlier, as it added the increased costs from a delay in the construction of low-priced ships and offshore facilities to the quarterly financial statement.

Operating loss came to 3.03 trillion won, while sales plummeted 63 percent to 1.66 trillion won.

Its creditors led by the state-run Korea Development Bank have carried out a thorough inspection of Daewoo Shipbuilding’s financial condition since July.

“If we count losses from Daewoo Shipbuilding’s overseas units, its additional losses will likely surpass 1 trillion won,” said the source who asked for anonymity due to the sensitivity of the issue.

Daewoo Shipbuilding’s units in Romania, China and North America are accountable, he added.

When the inspection is finished, the creditor banks will announce a restructuring plan later this month to revive the ailing company.

Shares of Daewoo Shipbuilding plunged the daily limit of 30 percent on July 15 due to concerns about heavy losses and received a credit downgrade the following day.
Source: Yonhap

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