THE world's largest shipbuilder, Hyundai Heavy Industries (HHI) of South Korea, is back in the black by posting a net profit of KRW682.3 billion (US $594.8 million) for 2016, up from a loss of KRW1.36 trillion for 2015, according to the company's latest financial statements.
Operating profit for 2016 totalled KRW1.64 trillion, up from a loss of KRW1.54 trillion 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 stabilisation 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 per cent year over year to KWR39.32 trillion, according to American Shipper.
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 December 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 KWR11 trillion by 2020 to aid its ailing shipbuilding industry, according to multiple media reports.