World’s Largest Shipbuilder Reports $2 Billion Loss in 2014

hyundai heavy industries
Hyundai Heavy Industries shipyard in Ulsan, about 410 km (255 miles) southeast of Seoul. REUTERS/Lee Jae-Won

South Korea’s Hyundai Heavy Industries, the world’s largest shipbuilder, has reported operating loss of KRW 3.25 trillion in 2014, or about USD $2.96 billion. The operating loss in 2014 is compared to a profit of KRW 802 billion in 2013.

Full-year revenues hit KRW 52.58 trillion (US$47.9 billion) in 2014, down 3% from KRW 54.19 trillion in 2013, the company said.

The company reported a net loss of KRW 2.2 trillion (US$2 billion) for the year, compared to a profit of KRW 146.3 billion in 2013.

In the fourth quarter, revenues were up 11.6 % from the previous quarter to KRW 13.8641 trillion thanks to increased working days, receipt of change orders from clients and the progress of mega-sized EPC projects in offshore and onshore businesses, the company reported. However, in year-over-year (YoY) terms, HHI witnessed a slight drop of 6.5 % in revenues as low oil prices hurt the refinery business, according to HHI.

HHI reported that in Q4 its operating loss narrowed quarter over quarter (QoQ) to KRW 22.3 billion from KRW 1.9346 trillion due to reduced provisions in both HHI and its affiliate companies. Operating loss dropped YoY as well due to provision cutbacks in shipbuilding business and the receipt of change orders worth $208 million in its offshore business.