Daewoo shipbuilding posts worse-than-expected quarterly loss

[SINGAPORE] Daewoo Shipbuilding & Marine Engineering Co, the world's second-largest shipbuilder, posted a bigger-than-estimated loss for the second quarter after sales declined.

The net loss, excluding minority interest, widened to 1.19 trillion won (S$1.1 billion) in the three months ended June, from a restated loss of 436.2 billion won a year earlier, the company said in a regulatory filing Tuesday. That compares with the 14.2 billion-won average of seven analyst estimates compiled by Bloomberg. Sales fell to 3.39 trillion won from 3.96 trillion won.

Daewoo Shipbuilding said its results will improve from the third quarter. The world's top three shipyards, all based in South Korea, plan to raise a combined 8.41 trillion won through asset and share sales after setting aside provisions for losses in offshore projects and as orders dry up. They are among Asian shipbuilders that are posting losses or smaller profits and cutting jobs amid a drop in oil prices and slowing global economy.

Daewoo Shipbuilding posted a second-quarter operating loss of 423.6 billion won, compared with a loss of 582.1 billion won a year earlier.

Shares of Daewoo Shipbuilding have been suspended from trading since July 15 while investigations are under way on falsification of earnings.

Korea Development Bank and Export-Import Bank of Korea, two key creditor banks of Daewoo Shipbuilding, pledged in October last year to provide 4.2 trillion won in loans and equity. Korea Development Bank is also the shipbuilder's biggest shareholder.

BLOOMBERG