Hyundai Heavy reports second black ink quarter
JULY 27, 2016 — South Korean shipbuilding giant Hyundai Heavy Industries stayed in the black in the first half of the year by bringing in an operating profit of 882.4 billion won
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Hyundai Heavy delivers world’s largest semi
JULY 17, 2016 — The world’s largest shipbuilder has delivered the world’s largest largest semi-submersible drilling rig. South Korea’s Hyundai Heavy Industries (HHI) delivered the 123 m x 78 m Ocean Greatwhite
Hyundai Heavy inks smart ship software MOU
JULY 6, 2016 — Hyundai Heavy Industries (HHI), the world’s largest shipbuilder, has signedof a Memorandum of Understanding for creating an eco system for smart ships with SK Shipping, Intel, Microsoft, the
Hyundai Heavy unveils $3 billion restructuring plan
JUNE 8, 2016 — South Korea’s Hyundai Heavy Industries (HHI), the world’s largest shipbuilder, today said that it will implement a management improvement plan by 2018. Worth 3.5 trillion won (over $3
Hyundai Heavy cuts management jobs, may close dry docks
MAY 9, 2016 — Shipbuilder Hyundai Heavy Industries (HHI) says it will “spur the efforts to enhance its competitiveness by implementing intense management reform plans including the voluntary retirement of manager-level employees.”
Hyundai Heavy reports another loss making year
FEBRUARY 4, 2016 – Hyundai Heavy Industries (HHI), the world’s largest shipbuilder, racked up a 2015 operating loss and net loss of 1.5401 trillion won ($1.3 billion) and 1.3632 trillion won ($1.1
Hyundai Heavy’s hurt continues
Both figures were far worse than analysts had predicted.
On a quarter-on-quarter basis, sales declined 8.7%, while operating loss and net loss widened by 507.4 billion won and 209 billion won respectively, due to delays in offshore projects and lackluster sales by HHI’s construction equipment business.
HHI said the rise in operating loss was attributable to early recognition of losses from contract cancellation of a semi-submersible rig; a loss provision for adverse changes in the offshore business environment such as the oil price decline; and an increase in the restructuring cost from divestiture of underperforming subsidiaries.
A source said, “The shipbuilding business was hit by cancellation of a semi-submersible rig as oil prices nosedived to $40 a barrel. The offshore business set up a reserve for possible losses that may be incurred from belated change orders, increased manhours or delays in delivery caused by design changes.”
HHI also booked the cost of liquidating unprofitable overseas subsidiaries, which started in 2014, as 3Q15 losses.
A source in HHI said, “With a heavy focus on profitable businesses, HHI has taken bold steps to eliminate ailing subsidiaries since September 2014, as keeping them would only inflate the losses. The restructuring process is nearing its end, and part of the cost has been recognized as losses this quarter.” Meanwhile, HHI sees 4Q15 as a critical juncture for earnings turnaround. A source in HHI said, “4Q15 can be the starting point of earnings improvement: the shipbuilding business is recovering, with the phase-out of low-price orders and profit turnaround of commercial vessels. The offshore business has also booked all perceivable losses. Also, other businesses such as electro electric systems and engine and machinery have continued to cut costs.
“Even though the company has failed to turn a profit in 3Q15, it will spare no effort to normalize its operations, with a focus on profitable businesses, reshuffle for more responsible management of each business division, cost competitiveness enhancement, disposal of stock holdings and elimination of poor-performing subsidiaries to set the stage for a turnaround.”
Time will tell.
Hyundai Heavy’s shares were down 2.3% at the end of trading in Seoul today
Seadrill cancels rig order at Hyundai Heavy
The unit was ordered during the second quarter of 2012 and the delivery date stated in the construction contract was by December 31, 2014.
“Due to the shipyard’s inability to deliver the unit within the timeframe required under the contract, the company has exercised its cancelation rights,” says Seadrill, which notes that, under the contract terms, it has the ability to recoup its $168 million in pre-delivery installments to the shipyard, plus accrued interest.
In fourth quarter 2012, Seadrill was awarded a five year contract for the West Mira with Husky Oil Operations for operations in Canada and Greenland.
In its second quarter earnings report, Seadrill reported that, due to the late delivery of West Mira, the company had tentatively agreed with Husky to reduce the dayrate of the West Mira drilling contract.
Seadrill says it remains in discussions with Husky to find an alternative solution to meet its drilling requirements.
Hyundai Heavy to put ships on “Internet of Things”
JULY 16, 2015 — Your refrigerator and home heating system can be linked to the “Internet of Things,” so why not a ship? South Korean shipbuilding giant Hyundai Heavy Industries, and global
Hyundai Heavy gets DNV GL nod for SkyBench concept
JUNE 11, 2015 — Korea’s Hyundai Heavy Industries reports that it recently received approval in principle (AIP) from DNV GL for its SkyBench design concept for maximizing cargo loading capacity of large