Positive Swing Expected This Year
Korea Shipbuilding & Offshore Engineering announced on Feb. 7 that its 2021 sales and operating loss are 15.4934 trillion won and 1.3848 trillion won, respectively. It failed to turn a profit, although sales rose 4 percent.
Samsung Heavy Industries said on Jan. 27 that it recorded an operating loss of 1.312 trillion won last year, when its annual sales fell 3.5 percent to 6.622 trillion won. Daewoo Shipbuilding & Marine Engineering’s 2021 sales and operating loss are estimated at 4.365 trillion won and 1.3011 trillion won, respectively.
This has to do with adverse business conditions attributable to COVID-19 and increases in raw material prices. Last year, thick plate prices in particular rose a lot. The price accounts for approximately 20 percent of the total cost of building a ship.
According to industry sources, the three shipbuilders are expected to turn a profit this year or next year, as their contracts signed last year amount to US$45.7 billion. For reference, their goal was US$31.7 billion last year.
From Jan. 1 to Feb. 7 this year, Korea Shipbuilding & Offshore Engineering and Daewoo Shipbuilding & Marine Engineering signed 34 and 12 new shipbuilding contracts, respectively. In most cases, it takes at least a year for a new shipbuilding contract to be reflected in the performance of a shipbuilder. It is a period in which the ship is designed and preparations are made for actual shipbuilding.