Daewoo Shipbuilding swings to net loss of 1.25 trillion won in H1 due to increased costs, allowances

Daewoo Shipbuilding & Marine Engineering Co. swung to a net loss of 1.25 trillion won in the first half due to increased costs and allowances after posting a net profit of 294 billion won a year ago.

Sales dropped 45 percent to 2.17 trillion won.

The company suffered an operating loss of 1.22 trillion won after posting an operating profit of 352 billion won last year.

DSME cited weak orders and increased allowances as the main culprit.

The shipbuilder allocated 800 billion won for allowance for legal disputes with clients and increased costs from rising steel plate prices.

Fortunately for DSME, it obtained new orders worth $6.3 billion, equivalent to 82 percent of its annual order target of $7.7 billion in the first six months of the year.

New orders were up more than four times in the first half compared with $1.53 billion a year ago, DSME said.

Its order backlogs stood at $21.6 billion, going back more than two years, it said.

DSME is on track to surpass the annual order target in the second half with LNG carrier orders expected from Qatar.