Daewoo Shipbuilding & Marine Engineering Reports Operating Loss of 1.7547 Trillion KRW Last Year... Annual Deficit After 5 Years

At the Okpo Shipyard of Daewoo Shipbuilding & Marine Engineering in Geoje, a worker begins the morning shift with the rising sun. The COVID-19 pandemic has been ongoing for nearly two years. Countries around the world are implementing quarantine policies to overcome it and are putting all their efforts into escaping the disaster situation. The industrial landscape altered by COVID-19 is also adapting quickly. In particular, the shipbuilding industry's business environment is expected to improve in 2022. With an increase in new orders, shipbuilders' bargaining power on prices has strengthened, and investment capacity for ships to comply with environmental regulations has expanded, welcoming the new year with sparks of improvement.
Geoje ? Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Hwang Yoon-joo] Daewoo Shipbuilding & Marine Engineering (DSME) recorded an annual loss for the first time in five years since 2016.

DSME announced on the 8th that its consolidated sales last year amounted to 4.4866 trillion won, a 36.2% decrease compared to the previous year. Operating loss and net loss were 1.7547 trillion won and 1.6998 trillion won, respectively.

DSME explained that sales sharply declined due to poor orders over the past two to three years, and the rapid increase in material prices including steel led to the reflection of construction loss provisions worth about 1.3 trillion won, resulting in deteriorated performance.

Additionally, provisions of approximately 200 billion won were recorded due to claims from offshore construction clients and evaluations related to undelivered drillships, which further widened the deficit.

However, DSME stated that it has secured three years' worth of orders by achieving last year's order target, and has already secured $2.72 billion in orders by the end of February this year, indicating prospects for improved performance in the future.

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