Join our crew and become one of the 104,480 members that receive our newsletter.

DSME 2Q Hit By Discounts

DSME 2Q Hit By Discounts

GCaptain
Total Views: 1
August 29, 2012

SEOUL–Daewoo Shipbuilding & Marine Engineering Co. (042660.SE) on Wednesday posted a 33% decline in its second-quarter net profit, due to earlier discounts the shipbuilder offered to boost sales.

Consolidated net profit for the three months ended June 30 fell to 96.4 billion Korean won ($85 million) from KRW142.78 billion a year earlier, the world’s third-biggest shipbuilder by sales said.

Operating profit plunged 63% to KRW114.1 billion from KRW308 billion while sales rose 9.3% to KRW3.951 trillion from KRW3.615 trillion.

As of Wednesday, the company achieved 71%, or $7.83 billion, of its order target of $11 billion for the year.

Earlier this month, Hyundai Heavy Industries Co. (009540.SE) and Samsung Heavy Industries Co. (010140.SE), Daewoo’s two bigger rivals, reported sharp declines in their second-quarter earnings due to the same reason.

In 2009, DaewooShipbuilding gave discounts to attract customers reeling from the 2008-2009 global financial crisis as orders fell sharply .

Shipbuilders typically book a large part of payments for vessels right before delivery, and the outlook continues to be bleak through early 2013 as they deliver low-priced ships for which the orders were booked a few years earlier, analysts say.

By Kyong-Ae Choi. (c) 2012 Dow Jones & Company, Inc.

Unlock Exclusive Insights Today!

Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.

Sign Up
Back to Main
polygon icon polygon icon

Why Join the gCaptain Club?

Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.

Sign Up
close

JOIN OUR CREW

Maritime and offshore news trusted by our 104,480 members delivered daily straight to your inbox.

Join Our Crew

Join the 104,480 members that receive our newsletter.