South Korean shipbuilders’ earnings to remain weak through next year

South Korean shipbuilders’ earnings are expected to remain in the doldrums until the first half of 2016, although their third-quarter bottom lines may beat estimates after suffering a record loss three months earlier, analysts said.

Samsung Heavy Industries Co., the country’s No. 3 shipbuilder, is estimated to log 29.8 billion won (US$25.4 million) in operating income for the third quarter, down 84 percent from a year earlier, with its sales likely to dip 8.32 percent to 2.99 trillion won over the cited period, according to the data compiled by FnGuide, which provides financial information.

Samsung Heavy suffered a record 1.55 trillion-won operating loss during the second quarter, hit by increased costs from a delay in the construction of offshore facilities.

“Earnings may remain weak, especially due to weak demand for offshore facilities,” said Yoo Jae-hoon, an analyst at NH Investment & Securities.

Hyundai Heavy Industries Co., one of the country’s big three shipyards, is forecast to log an operating income of 26.1 billion won for the third quarter, with sales dipping 6.9 percent on-year to 11.55 trillion won.

Daewoo Shipbuilding & Marine Engineering Co., the country’s No. 2 shipyard, is expected to rack up an operating loss of 35 billion won in the current quarter, with sales likely to plunge 13.5 percent on-year to 3.65 trillion won.

Daewoo Shipbuilding already logged an operating loss of 3.03 trillion won during the April-June period.

“Their third-quarter earnings may exceed market estimates, but business performances are expected to remain dull and the quality of their revenues will not be good,” said Jung Dong-ik, an analyst at Hyundai Securities.

Copyright Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to as the source.