South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering Co (DSME) informed that it has achieved two profitable consecutive quarters in the first half of this year.

DSME also reported improved financial structure reaping fruit from debt restructuring.

As disclosed, 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.

During the second quarter, DSME’s net profit jumped to KRW 1. 25 trillion from KRW 234 billion in Q1 and its operating profit rose from KRW 223 billion in Q1 to KRW 665 billion in Q2.

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, deliveries of offshore energy facilities, a sector which was among the key sources of DSME’s financial losses, helped clear out the backlog and restore stable profits in addition to orders for LNG carriers and ultra large containerships.

A DSME spokesperson said that 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.

In addition, DSME plans to implement measures aimed at early management normalization, in addition to the repayment of debt to creditor banks and investors.

Namely, the shipyard aims to cut costs for workers by 25 percent to KRW 640 billion, and further reduce its workforce to below 9,000 by 2018, Yonhap news agency reports.

World Maritime News Staff