|
HONG
KONG—Daewoo Shipbuilding & Marine Engineering Co., the
world’s third-largest shipyard, said sales will rise to
a record 9.9 trillion won ($10.5 billion) this year as
it builds more vessels at higher prices.
The
company didn’t provide a comparative figure for 2007 in
its regulatory filing today in Seoul. The 2008 sales
forecast is 41 percent more than the 7 trillion won it
projected for 2007 in January last year.
Shipyards in
South Korea, the
world’s largest shipbuilding nation, may report higher
earnings this year as they deliver more vessels to
transport raw materials to China and finished goods to
the rest of the world. Hyundai Heavy Industries Co. and
other rivals are expanding production capacity to work
through more than three years of order backlogs.
“Earnings will continue to increase this year because
the price per ton that is being built will be higher,”
said Kim Soo Jin, an analyst at Hannuri Investment &
Securities Co. in
Seoul. “Operating profit margin to sales is expected to
reach a combined average of 11 percent for the
shipbuilders this year, compared with 8.5 percent last
year.”
Kim has
a “buy” recommendation for Daewoo Shipbuilding.
Daewoo
Shipbuilding gained 0.3 percent to 49,200 won as of
10:57 a.m. in Seoul. The stock rose 66 percent in the
past year, compared with a 30-percent climb in South
Korea’s Kospi index.
Ship
prices, rising since 2003 from a 10-year low, have more
than doubled to a record as global economic growth
increased demand for consumer goods and raw materials,
according to Clarkson Plc, the world’s biggest
shipbroker. South Korean yards, which received record
orders for a fifth year in 2007 and have backlogs that
stretch into 2012, are now delivering vessels from
contracts they won in 2004 and 2005.
Daewoo
Shipbuilding expects to build more offshore platforms
this year as well as vessels that can carry liquefied
natural gas and oil. In the first 11 months of last
year, Daewoo Shipbuilding delivered 43 vessels, compared
with 45 for all of 2006.
“Competition is expected to be fierce this year as
production capacity has expanded globally and raw
material, including oil, prices are surging,” Daewoo
Shipbuilding’s chief executive officer Nam Sang Tae said
in a New Year’s speech to employees. “Orders for
offshore platforms and vessels to transport containers
are expected to lead demand this year.”
Daewoo
Shipbuilding expects this year’s orders to reach $17.5
billion, 19-percent less than the record $21.5 billion
in 2007, the company said. That is because of an
unexpected surge in demand for container vessels last
year.
Bigger
rival Hyundai Heavy said on December 31 it expects sales
to rise 16 percent this year to a record 18.06 trillion
won.
Orders
for ships, marine engines, offshore platforms and other
products may increase 1.8 percent to $27.4 billion.
Daewoo
Shipbuilding’s net income in the first 11 months last
year surged almost eightfold to 336.8 billion won. It
had an operating profit, or sales minus the cost of
goods sold and administrative expenses, of 275 billion
won, compared with a loss of 178.1 billion won a year
earlier. Sales climbed 30 percent to 6.32 trillion won.
The
shipyard will invest 770 billion won this year to expand
capacity by extending the length of its existing docks
and building a floating dock to make more vessels. It
didn’t say how much it spent last year. (Bloomberg) |
