Daewoo shipbuilding falls on quarterly loss
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.