South Korea’s major shipyards, led by Hyundai Heavy Industries Co., 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, industry sources said Sunday.
According to the data compiled by Yonhap Infomax, the financial news and information arm of Yonhap News Agency, Hyundai Heavy is expected to have logged an operating income of 142 billion won ($124 million) during the April-June period, but the estimate marks a drop from the previous quarter’s operating earnings of 164 billion won.
The shipyard’s sales are also expected to have slipped to 4.43 trillion won from 4.81 trillion won over the cited period, the findings showed.
Hyundai Heavy and its two affiliates have received new orders worth $3.8 billion through May, achieving around half of its annual order target of $7.5 billion.
Samsung Heavy Industries Co., 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.
Its sales are expected to have dropped to 2.02 trillion won from 2.44 trillion won over the cited period.
Samsung Heavy has secured a series of deals valued at some $5.2 billion this year. The shipyard set its annual order target at $6.5 billion.
Troubled Daewoo Shipbuilding & Marine Engineering Co. is also projected to be in positive territory. In the January-March period, the shipyard chalked up an operating income of 292 billion won.
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.
Last year, Hyundai Heavy managed to post profits, but the two others suffered losses.
The top three players conducted massive self-rescue plans to tide over their worst-ever slump. Last year, they cut at least 20,000 jobs.