DSME’s net profit down by 50% due to asset sales

Daewoo Shipbuilding & Marine Engineering (DSME), one of the country’s top three shipyards, said Thursday that its net profit halved in 2018 from a year earlier due to a loss from asset sales.

Net profit reached 320 billion won ($282 million) last year, compared with a profit of 645 billion won a year earlier, the company said in a regulatory filing.

Operating income surged 40 percent year on year to reach 1.03 trillion won as set-aside reserves, against potential losses, were reclassified as operating profits, while sales dipped 13 percent to 9.64 trillion won, it said.

It is the second-straight year in which the shipyard posted a profit.

Daewoo Shipbuilding clinched deals valued at $6.81 billion last year, surpassing its annual order goal of $6.6 billion. Samsung Heavy bagged $6.3 billion worth of orders last year, lower than its target of $8.2 billion.

Last week, Hyundai Heavy Industries, the world’s largest shipbuilder by sales, signed a formal deal with the Korea Development Bank to buy its smaller local rival, DSME.

Under the deal, KDB will hand over its 55.7 percent stake in Daewoo Shipbuilding to an entity to be set up later by Hyundai Heavy, in return for 1.25 trillion won worth of stock to be sold later by the entity.

Hyundai Heavy will also commit 2.5 trillion won to the entity, which will be used to repay Daewoo Shipbuilding’s debts.

Yonhap