Mega Losses Loom Over Ship Building’s ‘Big 3’


The world’s big three shipbuilders – Hyundai Heavy Industries (HHI), Samsung Heavy Industries (SHI) and Daewoo Shipbuilding and Marine Engineering – could face crippling losses in Q2, 2015, as they each go through the process of loss provisioning and restructuring, according to IHS Maritime 360.

HHI recently went through a stage of redesigning its management strategy by merging its business units in a bid to recover from massive losses.

Sung Ki-jong and Lee Ho-seung, Analysts at KDB Daewoo Securities, said: “Although the… rise in merchant vessel orders are positive, earnings at other business units are unlikely to recover anytime soon. Hyundai Oil bank's earnings are likely to fluctuate depending on oil prices, increasing HHI's earnings volatility.”

HHI could see losses of more than US$200 million in Q2, 2015.

SHI could experience a $125 million loss and DSME a $976 million loss, which is much more than what other analysts estimated previously.

Despite losses of this magnitude, HHI recently signed a multi-billion dollar deal with Maersk Line to build more container ships.

(Source: iStock)

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