KSOE lands $745 million in orders for LNG ships

Hyundai Heavy Industries' crude oil carrier. [YONHAP]

Korea Shipbuilding & Offshore Engineering (KSOE) landed a $745 million order to build four liquefied natural gas (LNG)-powered ships for a company based in Europe, becoming the first shipbuilder in the country this year to get LNG carrier orders.

Subsidiaries Hyundai Heavy Industries (HHI) and Hyundai Mipo Dockyard (HMD) will build two ships each and deliver them starting in June 2023, KSOE reported Friday.

HHI is a shipyard and marine engine builder, while HMD is a builder of medium-sized ships.

KSOE’s goal this year is orders of $15.7 billion. With the orders announced Friday, the company landed orders for 42 ships worth $2.9 billion, or 19 percent of the goal.

Its orders for the first half of the year were 58 percent smaller than a year earlier.

The shipping industry in Korea had expected the demand for LNG ships to grow this year after the International Maritime Organization (IMO), a United Nations shipping agency, banned ships from using fuel with a sulfur content above 0.5 percent, compared with the previous ceiling of 3.5 percent, starting this year. The regulations are intended to reduce pollution.

But the Covid-19 crisis has been delaying ship orders.

KSOE announced in a preliminary report Thursday that it reported 3.9 trillion won ($3.3 billion) in sales in the second quarter, up 0.1 percent on year. Its operating profit stood at 92.9 billion won, up 67.7 percent on year.

Samsung Heavy Industries announced in a preliminary report on Friday that it reported 1.69 trillion won in sales in the second quarter, down 4.5 percent on year. Its operating loss expanded 1,157 percent from 56.3 billion won in the second quarter last year to 707.7 billion won in the second quarter.

BY JIN MIN-JI [jin.minji@joongang.co.kr]