Hyundai Heavy Industries Co Ltd, the world"s largest shipbuilder, expects a lingering shipbuilding downturn in 2010.
South Korea"s Hyundai Heavy Industries Co Ltd, the world"s largest shipbuilder, expects a lingering shipbuilding downturn in 2010 but said it aimed to boost new orders by two thirds next year.
New orders Hyundai received in 2009 dropped 62% from 2008 amid an order draught in its mainstay shipbuilding industry since last year"s financial crisis. Shippers suffering weak global demand not only place few new orders but ask for existing ones to be delayed or cancelled.
?The global economic recovery is set to continue in 2010 but the shipbuilding industry will see the downturn lasting for a considerable time due to overcapacity and weakness in shipbuilding financing,? Hyundai"s vice chairman and chief executive officer, Min Keh-sik, said in a statement to mark the closing of 2009.
Top shipyards including Hyundai, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries have weathered the slump thanks to order backlogs amassed in past years.
But the prolonged downturn will likely force them to take lower-margin orders next year, hurting profits in the coming years, analysts say.
Hyundai said in a filing to the Korea Exchange that it was targetting $17.7 billion in new orders next year, compared with $10.6 billion in 2009.
The company, which also builds offshore plants, engines and wind power equipment, said it aimed to post 21.55 trillion won ($18.52 billion) in sales in 2010, compared with 21.33 billion won in 2009.
The revenue target is lower than a 23.33 trillion won average analyst forecast compiled by Reuters I/B/E/S.
Hyundai"s shares fell 13% this year weighed down by the weak outlook, against the wider market"s 50% gain.
Hyundai added it planned capital expenditure of 472.5 billion won in 2010, without providing details.