South Korean large shipbuilders are likely to continue their losing streak in terms of profit throughout next year, executives said.
Tumbling oil prices and fewer transactions are also sapping the demand for new ships, they add.
The price of oil, which is one of the key factors to gauge the healthiness of the shipbuilding sector, dropped to its lowest level in more than a year because of fears of another recession.
"It’s true that Europe’s worsening debt-related crisis has left the economy of the United States on the edge of a new recession, which is truly bad for shipbuilders," said Hyundai Heavy Industries chief executive Lee Jae-sung in a meeting with reporters.
"Since the second quarter, Hyundai has seen a decline of corporate profit and we are worrying about it. Next year will be difficult," the chief executive said.
"We don’t see any big turn in the global shipbuilding market next year. I have no question that the following year will also be difficult. Prices for ships have seen a steep decline," said Roh In-sik, chief executive of Samsung Heavy Industries.
"Samsung is being asked to secure our bottom line. All key indicators are bad," he added.
But Daewoo Shipbuilding & Marine Engineering painted a rather positive outlook for the industry as its chief executive believes that it’s unlikely the sector will fall into another recession.
"The global shipbuilding industry has been showing signs of a mild recovery since 2008. Although some say the worse is yet to come, I believe it’s very unlikely that the industry will fall into another deep recession," said its chief executive Nam Sang-tae.
Published : October 6, 2011
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