Korean Shipyards Empty

The three largest ships yards in the world are in Korea and they are struggling for work and losing lots of money.

Daewoo Shipbuilding and Marine Engineering, Samsung Heavy Industries and Hyundai Heavy Industries (HHI) cite plummeting oil prices and delayed offshore projects. The yards are reporting significant losses in second quarter 2015 and Daewoo leads the way reporting a 3.03 billion KRW ($2.62 billion) loss. Samsung reports1.55 trillion KRW loss while Hyundai says it lost 171 billion won. The combined losses is the 4.75 trillion KRW or $4.1 billion.

Daewoo says delays in the construction of gas oil rigs as well as lower freight rates in the cargo markets have impacted revenues. In 2010, Korean yards began investing heavily in oil and gas rigs in an effort to challenge competition with the Chinese yards. At that time, oil prices were about $100 per barrel and the industry was booming.

The 2nd quarter losses for the three Korean giants were Daewoo’s 2015 Q2 revenue fell 63.1 percent, Samsung’s revenues fell 44.8 percent, and Hyundai posted a 240 KRW loss down from last year’s loss during the same period of 489 KRW.