Samsung Heavy Industries Eyes Operating Profit in 2019

Larger order intake and reduced fixed costs are expected to push South Korean shipbuilder Samsung Heavy Industries (SHI) to an operating profit next year, the shipbuilder’s newly appointed CEO Nam Joon-ou is quoted as saying by Yonhap news agency.

Nam took over the reins at the financially-troubled South Korean shipbuilder in December 2017 on the back of Park Dae-young’s resignation, as he assumed responsibility for the poor business performance of the yard.

The improved demand from owners is likely to result in USD 8 billion worth orderbook in 2018, according to Nam, up from last year’s USD 6.9 billion.

Furthermore, SHI has set out to slash its operating losses this year, reducing them to KRW 240 billion (USD 230 million) from USD 490 billion reported in 2017.

Sales for 2019 are expected to reach around USD 6.9 billion against USD 7.4 billion from 2017, Yonhap informed.

Nam also called on its employees to join the cost-cutting efforts of the shipbuilder by renouncing 10 percent of their salary so as to help the company bolster its financial position.

In an effort to boost its liquidity, the company has also announced plans to launch a KRW 1.5 trillion (USD 1.36 billion) rights offering by May 2018.

SHI started the year with yet another workforce reduction measure. Namely, the company has dismissed 30 percent of its executives, reducing its board staff to 50 members, down from 72.

Additionally, SHI reorganized further its business divisions, shrinking the number from 89 to 67 departments.

World Maritime News Staff