26-07-2016

Korean shipbuilders projected to see profit downturn in Q2

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South Korean shipbuilders are likely to see a profit downturn in the second quarter of the year, hit by the ongoing industry-wide restructuring.

Local securities said the nation’s largest three shipyards — Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering — will record lackluster quarterly revenues.

Hyundai Heavy Industries, scheduled to announce its earnings on July 27, is forecast to post an operating profit of between 4 billion won (US$3.5 million) to 62.6 billion won. The figure falls short from the previous quarter’s 325.2 billion won. The decline was attributed to the 200 billion won of losses the firm will incur due to voluntary retirement expenses.

“Expenses such as those involving voluntary retirement will have an impact on the second and the third quarter performances,” an industry insider said.

Samsung Heavy Industries’ operating profit was forecast to remain within 172 billion won of losses to 44 billion won of profit. The shipbuilder posted a 6.1 billion won in the first quarter that reflected a 76.8 percent on-year decline. Samsung also spent about 100 billion won on voluntary retirement expenses.

The Samsung affiliate will announce its earnings on July 29.

Daewoo Shipbuilding & Marine Engineering, after posting 26.3 billion won of losses in the first quarter, is expected to continue to be in the red. Daewoo will issue its earnings report in the second week of August.

Source: The Korea Herald

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