Daewoo Shipbuilding & Marine Engineering Co., the world's third-largest shipbuilder by order value, said Tuesday it swung to a net loss in 2019 from a year earlier on lower orders and higher costs.
For all of 2019, Daewoo Shipbuilding shifted to a net loss of 46.5 billion won (US$39 million) from a net profit of 320 billion won a year earlier, the company said in a regulatory filing.
"The company began to build ships that were ordered (years ago) in low-priced deals and with fixed costs increasing due to a decline in new orders, there has been a deterioration in profitability," the filing said.
Moreover, the company put aside an additional provision in case it loses a damage suit filed by its shareholders. This is also weighing on the bottomline, it said.
Daewoo Shipbuilding expected uncertainties in global markets will continue to grow and shipbuilders will have difficult times for the time being.
Operating profit plunged 71 percent to 292.8 billion won in 2019 from 1.02 trillion won a year ago. Sales fell 13 percent to 8.36 trillion won from 9.64 trillion won during the same period, it said.
The company aims to achieve $7.21 billion worth of orders in 2020, up from $6.88 billion orders last year.