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HHI remains unprofitable on loss of $1.1bn in 2015

HHI remains unprofitable on loss of $1.1bn in 2015
South Korea’s Hyundai Heavy Industries (HHI) has stayed in the red in 2015 with a huge loss of KRW1.36trn ($1.13bn), as the shipbuilder continued to struggle in a tough shipbuilding market.

The loss of 2015, however, was narrowed from the bigger deficit of KRW2.21trn in 2014.

Revenue for 2015 was recorded at KRW46.23trn, down 12.1% compared to KRW52.58trn in 2014.

“2015 was a tough year for us due to unfavorable market conditions such as prolonged low oil prices and global economic downturn. We suffered losses incurred from the cancellation of semi-submersible rigs and increased man hours and delivery delays of offshore projects triggered by design changes,” HHI quoted an officer as saying.

The losses were also attributed to a one-off maintaining cost for drillships the shipyard delivered, loss provision for an offshore project, and increased on-site installation costs for two power plant projects.

The group’s construction equipment business was also unprofitable due to lackluster sales caused by global economic downturn and restructuring costs for ailing subsidiaries.

“Even though we have failed to turn a profit in 2015, we believe that we laid the groundwork for a turnaround for 2016 with a series of comprehensive restructuring measures ranging from liquidating unprofitable overseas subsidiaries and launching HR efficiency enhancement program to shoring up our finances by selling off stock assets,” the HHI officer said.