Hyundai Heavy in talks to build $1 billion oil tankers

Hyundai Heavy Industries, a major Korean shipbuilder, is in talks with at least two overseas shipping firms to build a slew of very large crude carriers, the combined value of which may reach up to $1 billion, industry sources said Monday.

According to the sources, Hyundai Heavy is in negotiations with a Hong Kong-based shipping firm and another firm based in Singapore over the deals to build up to 12 ships, when options are considered.

Very large crude carriers are considered the biggest oil tankers in the world.

Hyundai Heavy has clinched deals to build four ships, including two VLCCs, so far this year, raising hopes that its new orders for such ships will steadily increase down the road in tandem with the construction of refining facilities in the Southeast Asian region.

“Hyundai Heavy has been clinching contracts since late last year, and the shipbuilder is set to win more deals down the road,” said Rhyu Jae-hun, an analyst at NH Investment & Securities.

Hyundai Heavy swung to the black last year from a year earlier, thanks in part to reduced costs and improvement in its non-shipbuilding business. Net income came to 682 billion won ($594.7 million) last year on a consolidation basis, a turnaround from a loss of 1.36 trillion won a year earlier.

Sales dropped 15 percent to reach 39.32 trillion won, while it logged an operating profit of 1.64 trillion won, a rebound from an operating loss of 1.54 trillion won the year before. YONHAP