Hyundai Heavy beats forecast but sees lower orders

SEOUL: Hyundai Heavy Industries Co Ltd, the world’s largest shipbuilder, reported yesterday better-than-expected quarterly net profit but expected new orders to drop 23% this year due to the global downturn.

The shipbuilding industry faces challenges as shipping demand shrinks and new ship orders fall. Order cancellations by shippers struggling under a credit squeeze have hit smaller players such as Chinese shipyards.

Top ship makers such as Hyundai and its home rivals Samsung Heavy Industries and Daewoo Shipbuilding have weathered the downturn relatively intact, thanks to large order backlogs, but analysts warned of a difficult year ahead.

“Hyundai’s fourth-quarter results beat expectations.

“But new shipbuilding orders could drop to one-third (of last year’s levels) this year,” P.J. Yoon, an analyst at Samsung Securities, said.

Hyundai expected orders to fall to US$21.1bil in 2009 from US$27.5bil in 2008 but added that shipbuilding, construction equipment and engine orders would be hit.

But it predicted orders for offshore facilities and plants could rise on continuing demand from energy exploration projects.

Hyundai Heavy posted a 854 billion won (US$623.9mil) net profit in the October-December quarter, up by two-thirds from a year earlier and beating an average forecast for a 516.5 billion won profit from Reuters Estimates. — Reuters

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