High-value-added ship orders may boost sales of nation’s major shipbuilders
Published : 2013-10-21 19:39
Updated : 2013-10-21 19:39
Expectations are rising that the long-stagnant shipbuilding industry may at last rebound out the back of increased orders in the fourth quarter.
According to securities information service provider FnGuide, the nation’s top three shipbuilders will still score lower in the third quarter compared to last year, but all are expected to achieve above-target yearly sales with ease.
Hyundai Heavy Industries, the world’s largest shipbuilder, is expected to record 1.3 trillion won ($1.25 billion) in sales, up 0.7 percent from last year, but 278 billion won in operating profit, down 53.2 percent from last year.
Runners-up Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering, too, will see an increase in their quarterly sales and a fall in operating profit, FnGuide predicted.
“The operating profit level is yet under the influence of the low-cost orders signed in 2010-2011 during the global shipbuilding slump period,” said an official of the Korea Offshore & Shipbuilding Association.
Now that the unprofitable orders have almost been exhausted, however, pending orders will mostly be high-value-added ones involving offshore plants and special-purpose ships, the official explained.
“The shipbuilding industry’s performance is expected to turn positive in the last quarter of the year and lead to a seasonable start next year,” he said.
In hand with the shipbuilding industry, the steel sector hit its low point in the third quarter and will rally during the last quarter, according to the information provider.
“The sales records and profits are still in the red but considering the general economic situation, along with the nationwide electric power shortage this summer, the prospects are not so bad,” said an official of the Korea Iron & Steel Association.
The top two players ― POSCO and Hyundai Steel ― will largely benefit from their recently expanded steel manufacturing facilities, the KOSA official added.
“Despite the concerns on excess supply, the new blast furnaces will eventually lower the production cost and boost the Korean steelmakers’ competitiveness against Chinese competitors in the long term,” the official said.