South Korean shipbuilder Daewoo Shipbuilding and Marine Engineering (DSME) said that it would not be selling off its defense ship business.
The move was considered in May 2016 as part of the company’s cost cutting measures aimed at restoring financial liquidity.
“In order to normalize the business, the company has considered the division of the special ship business by considering the requirements of the laws and regulations and the effect of liquidity improvement of the company. However, it has been determined that the economic feasibility is low and it is decided not to pursue the division of the special ship business division,” DSME said in a stock exchange filing.
DSME has achieved two profitable consecutive quarters in the first half of this year following its debt restructuring.
The sales for the first half of the year amounted to KRW 6.1 trillion (USD 5.4 billion), the group’s operating profit came at KRW 888 billion, while its net income reached KRW 1.448 trillion.
This is a major recovery when compared to corresponding last year’s figures when DSME posted an operating loss of KRW 352.6 billion.
The return to black is mostly due to self-rescue measures launched by the company, which included cutting of workforce and company-wide cost reduction efforts.
Furthermore, the shipbuilder expects the profitable streak to continue to improve as more than 20 “highly profitable” merchant ships are scheduled for the second half of the year.
World Maritime News Staff