South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering Co. posted a first-quarter loss after incurring more costs to finish some offshore projects.
First-quarter operating loss came to 26.3 billion won ($22.8 million) , sharply narrowing from an operating loss of 1.06 trillion won in the last quarter of 2015, while sales plunged 21.6 percent on-year to reach 3.53 trillion won.
Net profit came to 31.4 billion won (US$2.7 million) in the January-March period, compared with a loss of 1.12 trillion won in the previous quarter, the company said in a regulatory filing.
The shipbuilder did not provide comparable figures on a yearly basis.
The troubled shipyard's results failed to reach the company’s projection of reaching KRW 500 billion in operating profits for the first quarter of this year.
The expectation was based on the company’s major restructuring efforts including cost-cutting measures which are projected to bring about job cuts ranging from 12,000 to 30,000 by 2019. The cuts are expected to be implemented gradually across the board.
A company official said, "As our profitability is getting improved, we hope we could turn to the black by the second quarter."
Daewoo Shipbuilding was the only shipyard among Korea's Big-three shipbuilding firms to have incurred an operating loss in the first quarter.
Its local rivals also managed to return to the black in the first quarter on the back of cost-cutting measures. Hyundai and Samsung Heavy Industries posted a first-quarter operating profit of 325.2 billion won and 6.1 billion won, respectively.
The shipbuilding industry, once regarded as the backbone of the country's economic growth and job creation, has been reeling from mounting losses caused by an industrywide slump and increased costs.
The big three shipyards racked up a combined loss of 7.7 trillion won last year. It was the first time that all three of the nation's largest industry players registered losses.