Korean shipbuilders fail to secure orders

South Korean shipbuilders Hyundai Heavy Industries Co and Daewoo Shipbuilding received no new orders in January, a steep decline from last year, due to faltering global demand, according to industry sources.

South Korea's "misery index", indicating the level of economic difficulty felt by the public, posted 11.8 last year, the highest since 1998 in the midst of the Asian financial crisis, according to LG Economic Research Institute. The index takes into account inflation rates and job market conditions.

However, Daewoo Shipbuilding & Marine Engineering Co, the world's third-largest shipyard, said yesterday its fourth-quarter earnings increased more than five-fold due to construction of more expensive vessels. Net profit reached KRW293 billion (Dh771 million) in the October-December period, compared to KRW53bn a year earlier, the company said in a regulatory filing. Sales jumped 69 per cent to KRW3.67 trillion over the cited period and operating income also climbed more than five-fold to KRW567bn.

For all of 2008, Daewoo's net income rose 25 per cent to a record KRW401.7bn. Sales rose 56 per cent to a record KRW11.1trn and operating income more than tripled to KRW1.03trn. Daewoo said it is aiming to win orders valued at $10bn (Dh36.72bn) this year, 42.8 per cent lower than last year's target of $17.5bn. The shipbuilder won orders valued at $11.8bn last year.

Hyundai Heavy Industries Co reported stronger than expected earnings for the fourth quarter of last year, helped by increased orders for high-priced ships.

South Korea, home to seven of the world's top 10 shipyards, clinched record-high orders in recent years because of strong demand for crude carriers and offshore exploration equipment amid lofty oil prices.

But with the worsening global economic crisis, new shipbuilding orders worldwide fell 52 per cent last year, with orders won by South Korean shipbuilders falling 47 per cent.

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