8 Trillion Won Loss
The total business losses of Daewoo Shipbuilding & Marine Engineering, Hyundai Heavy Industries and Samsung Heavy Industries for last year are estimated at more than eight trillion won. Specifically, the amount is estimated at approximately 5 trillion won for Daewoo and about 1.5 trillion won for each of Samsung and Hyundai. Such a large loss is unprecedented for the three shipbuilders.
Daewoo recorded 4.5317 trillion won (US$3.7829 billion) in losses during the first to third quarters of last year. The amount snowballed due to offshore plant business losses attributable to drillship contract cancelations and losses incurred at its overseas subsidiaries including Daewoo Mangalia Heavy Industries. Hundreds of billions of won is predicted to have been added to the losses in the fourth quarter.
Hyundai is expected to repeat a loss of more than one trillion won for the second consecutive year. From January to September last year, its business losses totaled 1.26 trillion won, with the company remaining in the red for eight quarters in a row. The losses are estimated to have reached 200 billion won in the fourth quarter. The three-quarter losses were 1.53 trillion won for Samsung. Still, this company is expected to have been in the black in the following quarter.
The CEOs of the three companies recently declared that they would yield profits this year. However, business environments are far from favorable for them. The global economic downturn and the slowdown of the Chinese economy is exacerbating the structural stagnation of the shipbuilding industry and losses attributable to delayed offshore plant deliveries are likely to continue this year.