Hyundai Heavy Industries Co., South Korea's leading shipbuilder, said Wednesday that it aims to achieve 7.98 trillion won ($7.5 billion) in sales this year as its president warned of an unprecedented crisis due to declining order backlogs.
"This year, we could face a grave situation that we have never gone through before," Hyundai Heavy President and CEO Kang Hwan-goo said in his speech for 2018.
He warned that Hyundai Heavy could face difficulties due to dwindling order backlogs and building work for offshore plants will "completely run out in a few months."
Hyundai Heavy has not won any offshore plant orders for the past two years.
The company's 2018 sales target represents a 60 percent decline from a decade ago.
The shipyard said it is expected to post an estimated 10.03 trillion won in sales for 2017. The sales target is based on a parent base.
Separately, Samsung Heavy Industries Co., another major South Korean shipbuilder, said it has cut the number of its executives to 50 from 72 in a move to hold senior officials accountable for poor performances and to demonstrate willingness to make every effort for a new take-off.
Samsung Heavy CEO Nam Joon-ou said his company is still in a crisis due to falling order backlogs.
He also stressed the importance of the successful rights issue to ensure a stable management of the company.
In December, Samsung Heavy announced a plan to raise 1.5 trillion won (US$1.3 billion) in a rights issue by May to improve its financial status.
Samsung Heavy has said its operating loss in 2018 could narrow to 240 billion won from an estimated 490 billion won in 2017. The company also expects to receive orders worth $7.7 billion in 2018, slightly up from an estimated $7.4 billion in 2017.
South Korean shipbuilders have struggled with an oversupply of vessels and declining orders since the 2008 financial crisis. (Yonhap)