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Daewoo shipyard reports net loss and reduced debt in 2019

By Lim Chang-won Posted : March 11, 2020, 08:34 Updated : March 11, 2020, 08:34

[Courtesy of Daewoo Shipbuilding & Marine Engineering]

SEOUL -- Daewoo Shipbuilding & Marine Engineering posted a net loss in 2019 due to worsening profitability and the setting of provisions for future increases in fixed cost burdens caused by sluggish orders. The shipbuilder predicted a difficult situation this year due to economic uncertainties.

Daewoo Shipbuilding & Marine Engineering (DSME) said that consolidated sales fall 13.3 percent on-year to 8.36 trillion won ($7 billion) in 2019. The company reported a net loss of 46.5 billion won compared to a net profit of 320 billion won a year ago. Operating profit fell 71 percent to 292.8 billion won.

DSME said its profitability worsened last year as it began to build ships ordered earlier at low prices and new orders declined. Its net profit also declined due to losses in asset value valuation and additional provisions.

The shipbuilder lowered its debt by 557 billion won to 7.52 trillion won at the end of 2019.

Under the control of South Korea's Hyundai shipbuilding group, DSME targets $7.21 billion in this year's orders, up from $6.88 billion in 2019.

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