Daewoo Shipbuilding & Marine Engineering, Q2 Sales 1.1 Trillion KRW and Operating Loss 99.5 Billion KRW... Reduced Deficit Margin

Daewoo Shipbuilding & Marine Engineering Seoul Office. / Photo by Moon Honam munonam@

[Asia Economy Reporter Donghoon Jeong] Daewoo Shipbuilding & Marine Engineering announced on the 16th through its consolidated financial results that it recorded Q2 sales of 1.1841 trillion KRW, an operating loss of 99.5 billion KRW, and a net loss of 176.1 billion KRW.

The first half results showed sales of 2.4295 trillion KRW, an operating loss of 569.6 billion KRW, and a net loss of 667.9 billion KRW. Compared to the same period last year, sales increased by about 12%, while operating and net losses decreased.

Daewoo Shipbuilding & Marine Engineering stated that although the loss margin significantly decreased compared to Q1, the deficit continued due to factors such as reduced sales caused by Russian sanctions and subcontractor union strikes. They also explained that the main cause of the first half deficit was the increased fixed costs of products under construction and a sharp rise in material prices including steel, which led to the recognition of approximately 350 billion KRW in construction loss provisions.

A representative from Daewoo Shipbuilding & Marine Engineering said, "We have set aside provisions for various potential risks that may arise in the future," adding, "We will do our best to improve future profitability through expanding orders of high value-added vessels, cost reduction, and productivity enhancement."

Meanwhile, following a rebound in the shipbuilding market, Daewoo Shipbuilding & Marine Engineering has achieved 6.67 billion USD, which is 75% of this year's order target of 8.9 billion USD. As of the end of July, the order backlog stands at 29.1 billion USD, which is generally considered a three-year workload sufficient for stable shipyard operations. Notably, among the 109 vessels in the order backlog, nearly half?46 vessels?are LNG carriers, raising expectations for future profitability improvement.