South Korea’s largest shipbuilder Hyundai Heavy Industries Co. finished the fourth quarter of 2017 in the red, hit by a strong won and higher prices of steel plate supplies.
According to its regulatory filing on Friday, the company posted an operating loss of 342.2 billion won ($316.1 million) in the quarter ended December. Sales were down 32.9 percent on year to 3.39 trillion won.
For the full 2017, its operating profit on a consolidated basis plunged 96.3 percent on year to 14.6 billion won. Sales fell 30.6 percent to 15.5 trillion won. Net loss totaled 93.4 billion won. The conglomerate spun off non-shipbuilding units last year, delivering poorer figures in the income statement, but improvement in the balance sheet.
Its shares closed Monday down 0.38 percent at 129,500 won.
The company slipped into the red after maintaining a solid profit in the previous three quarters.
“The strengthening of the won and the rise in shipbuilding steel price resulted in a spike in one-time expenses in the fourth quarter,” said a company official. “But brisk engine sales and improved marine business helped the firm achieve an operating profit for two straight years.”
The shipbuilder, hit hard by a slump in demand in the wake of the global recession, said it had significantly reduced its debt as a result of its self-rescue plan. Debt ratio was down to 89.9 percent last year from 114 percent in 2016. Net debt ratio was also cut to 18.5 percent from 39 percent.
Global demand for ships has also picked up with Hyundai Heavy and its two shipbuilding affiliates Hyundai Mipo Dockyard Co. and Hyundai Samho Heavy Industries Co. exceeding its annual target last year with 148 orders worth $9.9 billion.
The company forecast a rise in new orders this year as ship-owners would have to comply with the strengthened environmental standards related to sulphur oxide emissions and ballast water treatment. It said demand for gas tankers carrying liquefied natural gas or liquefied petroleum gas is also showing signs of improvement this year.
By Woo Je-yoon and Kim Hyo-jin
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