Japan’s Mitsubishi Heavy Industries, Ltd. (MHI) is planning to cut its shipbuilding activities as the company decided to cease taking orders for large passenger ships, Nikkei newspaper cited undisclosed sources.
The company reportedly opted for the move amid a plunge of 80 percent in new shipbuilding orders so far this year.
Nikkei further reported that MHI would spin off its design and development division and share shipyards with other shipbuilders.
After experiencing cost overruns in its cruise ship sector, the company decided to review its future position in the cruise shipbuilding industry, The Financial Times earlier said.
MHI booked additional extraordinary loss of JPY 50.8 billion (USD 457.1 million) in its cruise ship business for the fourth quarter of fiscal year 2015 due to the delay in delivery of German-based cruise line Aida Cruises’ two new cruise ships AIDAprima and AIDAperla, ordered from the shipbuilder in November 2011.
The additional amount pushed MHI’s overall extraordinary losses throughout fiscal year 2015 to JPY 103.9 billion.
World Maritime News Staff