South Korean ships and drilling rigs builder Hyundai Heavy Industries has reported its net loss for the 1Q of the year widened to 125.2 billion ( $117.2 million) won from 37.9 billion won ($35.5 million) quarter on quarter.
The company’s sales declined 11.7 % quarter-on-quarter from 13.8461 trillion Korean won ($12.95 billion) to 12.2281 trillion won ($11.44 billion), due to a reduction in tonnage under construction and plummeting oil prices.
Operating loss widened QoQ to 192.4 billion won ($180.2 million) from 22.3 billion won ($20.88 million) due to the booking of 161.4 billion ($151 million) won in retirement bonus, cost overruns resulting from construction delays of special ships including semi-submersible rigs, and postponement in reaching agreement with clients on change orders pertaining to offshore projects such as Gorgon project in Australia, for which the company is building LNG modules.
However, the Industrial Plant & Engineering Division turned profitable thanks to favorable change orders and the refinery business widened its profit thanks to robust refinery margin, HHI said.
“HHI attributes the increased loss in the first quarter to the one-off voluntary retirement payout and looks to further accelerate its drive to enhance efficiency and competitiveness with a greater focus on high-margin businesses,” the company said.