South Korea’s major shipyards are projected to report weaker-than-expected earnings for the third quarter of the year, due to increased costs and the construction of low-priced ships amid decreased new orders.
Yonhap News Agency, quoting data compiled by Yonhap Infomax, said that Hyundai Heavy Industries (HHI) is expected to log an operating income of 106 billion won (US$93.6 million) during the July-September period, compared with the previous year’s operating earnings of 322 billion won.
Samsung Heavy Industries (SHI), another big shipbuilder here, is forecast to rack up an operating income of 39 billion won for the third quarter, compared with an operating income of 84 billion won tallied a year earlier.
Troubled Daewoo Shipbuilding & Marine Engineering (DSME) is also projected to chalk up a profit under the current quarter. In the January-March period, the shipyard reported an operating income of 292 billion won. In the second quarter, its operating income reached 665 billion won.
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.