Hyundai Heavy Industries turns profit in 2016

The South Korean shipbuilder recorded a net profit of 682.3 billion South Korean won for 2016, up from a loss of 1.36 trillion won for 2015.    Hyundai Heavy Industries (HHI) had a net profit of 682.3 billion South Korean won (U.S. $594.8 million) for 2016, up from a loss of 1.36 trillion won for 2015, according to the company’s latest financial statements.
   Operating profit for 2016 totaled 1.64 trillion won, up from a loss of 1.54 trillion won for 2015. HHI attributed the profit to an increased volume of ships it won at profitable prices, continued efforts to cut costs and streamline shipbuilding processes, an improved oil refining margin, and increased sales of Hyundai Oil Bank, the company’s oil refinery subsidiary.
   HHI also said the stabilization of manufacturing processes for the offshore plant business, along with efforts to cut material costs of construction equipment and in the electro electric systems division played a role in the profit.
   However, revenues for 2016 fell 15 percent year-over-year to 39.32 trillion won.
   Looking ahead, HHI is building 14,500-TEU containerships and 49,000 DWT product/chemical carriers for the Islamic Republic of Iran Shipping Lines, with the first ship to be delivered in 2018, the shipbuilder said in December. HHI signed the contracts Dec. 9 in Seoul and said the deal would be financed by Korean financiers.
   At the end of October, the South Korean government committed to spend about 11 trillion won by 2020 to aid its ailing shipbuilding industry, according to multiple media reports.
   Overall, South Korea is home to the three largest shipyards in the world, which in addition to HHI, includes Samsung Heavy Industries Co., and Daewoo Shipbuilding & Marine Engineering Co. (DSME). The country’s fourth largest shipbuilder, STX Pan Ocean, filed for court receivership in South Korea in May, and Chapter 15 bankruptcy protection in the United States in October.