Shares of Hyundai Heavy Industries Co., the country's top shipbuilder, were quoted at 189,000 won (US$183) on the Seoul bourse as of 10:20 a.m., down 2.33 percent from the previous session's close. Samsung Heavy Industries Co. were down 1.06 percent at 27,900 won and Daewoo Shipbuilding & Marine Engineering Co. also sank 1.34 percent to 29,500 won.
Hyundai Heavy, also the world's largest, reported an operating loss of 189 billion won during the January-March period following an operating loss of 87.1 billion won the previous quarter, citing a slump in the sales of high-end ships and a fall in gains from its equity tie with an oil refining unit.
"It is unclear whether its shipbuilding business will turn around going forward," said Choe Kwang-shik, an analyst at Hi Investment & Securities.
Its share prices have dropped 34 percent since a yearly high of 291,500 won on Oct. 18 with its market cap declining by some 7.5 trillion won over the cited period.
Its smaller local rival Samsung Heavy also logged an operating loss of 365 billion won during the first quarter as it set aside reserves against possible losses from offshore facilities under construction.
"A decline in shipbuilding prices began to eat into their profitability," said Kim Hyun, an analyst at Shinhan Investment Corp. The analyst said local shipbuilders are bracing for fallout from massive low-priced orders won between 2009 and 2012.
"Market conditions are not favorable to them, and their earnings improvement may come in the second half," the analyst said.
Daewoo Shipbuilding, which has not yet announced its first-quarter earnings, however, is expected to have logged a profit during the first quarter. Market analysts put the shipbuilder's first-quarter operating income at 125 billion won, up 86 percent from a year earlier.
The shipbuilder already reflected possible losses from its money-losing shipbuilding orders and offshore facilities last year.