HHI expects new orders in 2012 to drop 20%

2 January 2012 (Last Updated January 2nd, 2012 18:30)

Hyundai Heavy Industries (HHI) is expecting its order growth to drop by 20% in 2012, amounting to less than half the orders it secured in 2011, due to the effect of the global downturn on maritime trade.

HHI

Hyundai Heavy Industries (HHI) is expecting its order growth to drop by 20% in 2012, amounting to less than half the orders it secured in 2011, due to the effect of the global downturn on maritime trade.

The South Korean shipbuilder is targeting $30.6bn worth of orders and sales of KRW27.6tn ($23.85bn) in 2012.

The 2012 annual order and sales targets are expected to increase 19.6% and 9.5% respectively over its results in 2011, which saw a 48% increase in year-on-year orders to $25.5bn and KRW25.2tn ($21.6bn) in sales.

In November 2011, the company reported a 29.97% drop in profit to KRW432.8bn ($387.5m) during Q3 2011, compared with the KRW618bn ($553m) it reported during Q3 2010.

The company said the dip in profit was mainly due to the decline of its offshore business; however, its revenue increased 11.28% to KRW5.9tn ($5.2bn) compared with the KRW 5.3bn it reported during the corresponding quarter in 2010.

The South Korean shipbuilder won $22bn of new orders during the first nine months of 2011, led by orders for high-end ships such as drillships and LNG carriers reporting a year-on-year rise of 58%, reaching 83% of its annual target of $26.6bn.

The company’s shipbuilding division won orders worth $10bn, its offshore division won $3.3bn and its engine and machinery division $2.8bn, reporting a rise of 226%, 22% and 51% year-on-year respectively.

The company has seven business divisions and is now focusing on offshore facilities such as drillships to increase its order target to $5.2bn this year, up from the $4.8bn in 2011.

According to reports, HHI is currently bidding for some major projects, including building a floating production storage and offloading vessel worth $3.5bn in Nigeria.

Shipbuilders, including HHI, are trying to diversify their businesses as demand for commercial ships, such as container carriers and bulk carriers, is sluggish.

Caption: HHI is aiming for $30.6bn in orders and sales of KRW27.6tn ($23.85bn) in 2012.