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Monday, December 17, 2018

$4.3B: Daewoo Shipbuilding has Record Loss

Maritime Activity Reports, Inc.

March 8, 2016

Image: Daewoo Shipbuilding and Marine Engineering

Image: Daewoo Shipbuilding and Marine Engineering

 South Korean shipbuilding major Daewoo Shipbuilding and Marine Engineering (DSME) posted a KRW 5.13 trillion (USD 4.3 billion) worth loss for the full year of 2015.  

Due to writing down more charges from offshore projects which are under construction, Daewoo Shipbuilding & Marine Engineering Company, the world’s second-biggest shipbuilder, has posted a record loss of US$4.3 billion in 2015, according to Bloomberg.
DSME’s sales fell by 23% when compared to the previous year standing at KRW 12.97 trillion and the company’s operating loss amounted to KRW 5.51 trillion, the company said in a stock exchange filing.
The shipbuilder, which wrote off losses from offshore projects in the quarter due to delays, has said it expects to make a profit this year as it works more on high-value vessels that carry gas.
The world’s second-largest shipbuilder said it reflected 400 billion won in losses stemming from its asset sales, while not fully booking receivables on its balance sheets.
Daewoo Shipbuilding said in a statement: “Earnings are expected to turn around this year as more high-valued gas carriers are built. The company has sufficiently set aside provisions that will eliminate any uncertainties.”
The shipyard said it is expecting an improvement during the first quarter of the year.
In October 2015, state-run creditors of DSME decided to pump KRW 4.2 trillion (USD 3.7 billion) into the company, however, the Korea Development Bank (KDB) said that there will be no additional bailouts for Daewoo Shipbuilding this year, since it has already received KRW 2 trillion in aid.
Another South Korean shipbuilder Samsung Heavy Industries recently made a loss of US$1 billion due to a slump in global demand.
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