Dae­woo ship­build­ing falls on quar­terly loss

The Pak Banker - - COMPANIES/BOSS -

SEOUL: Dae­woo Ship­build­ing & Marine En­gi­neer­ing Co. dropped the most in six weeks in Seoul trad­ing af­ter post­ing a big­ger-than-ex­pected fourth-quar­ter loss amid con­cern that ship­build­ing de­mand has dried up.

Shares of the world's se­cond-largest ship­builder fell 8.1 per­cent, the big­gest de­cline since Jan. 25, to close at 5,550 won in Seoul. The stock has dropped 73 per­cent in the past 12 months and is the third-worst per­former on the Kospi in­dex. Dae­woo Ship­build­ing posted an op­er­at­ing loss of 973.3 bil­lion won ($805 mil­lion) in the three months to De­cem­ber, nar­row­ing from a loss of 1.45 tril­lion won in the third quar­ter. The ship­builder, which wrote off losses from off­shore projects in the quar­ter due to de­lays, has said it ex­pects to make a profit this year as it works more on high­value ves­sels that carry gas.

"Op­er­at­ing losses were cer­tainly big­ger than what the mar­ket was ex­pect­ing and that has un­der­mined sen­ti­ment to­day," John Yu, an an­a­lyst at NH In­vest­ment & Se­cu­ri­ties Co. in Seoul, said by phone, with­out pro­vid­ing a fig­ure. "While earn­ings may im­prove this year, the big­ger con­cern go­ing for­ward is that or­ders for ships have dried up."

Global ship­builders have recorded 35 con­tracts so far this year, com­pared with 63 a year ear­lier, ac­cord­ing to a Daiwa Se­cu­ri­ties Group Inc. re­port Mon­day. Dae­woo Ship­build­ing has yet to win any or­ders this year, Daiwa said.

Fourth-quar­ter sales at Dae­woo Ship­build­ing fell 18 per­cent to 3.7 tril­lion won.

The com­pany ex­pects work from build­ing ships will con­trib­ute to 55 per­cent of its rev­enue this year and off­shore projects will ac­count for 33 per­cent, which will help im­prove earn­ings, it said Mon­day.

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