Hyundai Heavy Industries Holdings announced on Feb. 4 that its two affiliates, Hyundai Heavy Industries Co. and Hyundai Samho Heavy Industries had canceled 10 VLCC construction contracts worth 980 billion won due to the Oceanian client’s failure to pay construction fees within the deadline.
Hyundai Heavy Industries Co. signed a contract to build seven VLCCs for the Oceania-based shipping company in November 2020. Hyundai Samho Heavy Industries also signed a contract with the same client to build three VLCCs worth 295.7 billion won.
"The client did not pay the contractual shipbuilding fee within the deadline so we notified the client of the termination of the contracts,” Hyundai Heavy Industries Holdings said. The termination of the contract will be reflected in the shipbuilders’ business performance in 2020.
Korea Shipbuilding & Offshore Engineering (KSOE), the parent company of the two shipbuilding units, racked up 74.4 billion won in operating profits on a consolidated basis in 2020, down 74.4 percent from 2019. During the same period, its sales decreased by 1.8 percent to 14,903.7 billion won. It recorded operating loss of 18.09 billion won in the fourth quarter of last year, switching to a deficit.
Source: Business Korea