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South Korean Shipbuilders Underperformed in 2016

South Korean Shipbuilders

The top three South Korean shipbuilders aimed to win new shipbuilding contracts worth US$42.8 billion at the beginning of last year but attained only 15.1% of the target of the year.

It has been found that the three major South Korean shipbuilders aimed to win new shipbuilding contracts worth US$42.8 billion at the beginning of last year but attained only 15.1% of the target until the end of 2016.

Specifically, the figures were US$19.5 billion vs. US$4.4 billion in the case of Hyundai Heavy Industries, US$10.8 billion vs. US$1.55 billion in Daewoo Shipbuilding & Marine Engineering and US$12.5 billion vs. US$520 million in Samsung Heavy Industries.

The particularly low rate of achievement of Samsung Heavy Industries can be attributed to the delay of its major projects. “A US$2.5 billion contract was slated to be signed last year with ENI, an Italian oil company, but it has been put off,” the company explained.

This year, the three shipbuilders are not going to disclose their annual performance targets because conditions in the shipbuilding industry are showing no signs of improvement at all. According to industry sources, their total target for this year is estimated at approximately US$20 billion, close to their goal for 2016 reset at the beginning of the second half of last year. “The number of orders for new ships is likely to be one-third of that of an average year in 2017 and conditions in the industry are unlikely to get better until the end of that year,” one of them remarked.

The Original Posted by Jung Min-hee/Business Korea

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