South Korean shipbuilders could see their first quarter earnings fall significantly compared to figures reported for the same period last year.
While Hyundai Heavy Industries, the world’s largest shipbuilder, racked up an operating income of about US$405M in the first three months of the year, it is 53% down on the operating income reported a year earlier, according to data compiled by financial information provider FnGuide and reported by Korean news agency Yonhap.
Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering are also likely to report shortfalls of 18% and 9% respectively, according to the data.
Analysts suggest that while Korean shipbuilders continue to win contracts, newbuild prices have tumbled putting heavy dents in the bottom line. According to the report, in terms of their value, newbuild orders dropped 31.8% on-year to $5.68bn in the first quarter partly due to a drop in the average price of ships and also a drop in global orders for large and high-value added offshore plants.
HHI has reportedly been hit particularly hard with new orders down 23% on the same period last year. However, as many shipyards diversify to meet increasing demand from the offshore oil and gas sector, Korea’s top three shipbuilders are likely to enjoy an increase in orders for high-priced vessels over coming months.
[mappress] Imarest, April 24, 2013