hyundai shipbuilding stocks plunge on grim earnings forecast
Last Updated : GMT 11:59:16
Egypt Today, egypt today
Egypt Today, egypt today
Last Updated : GMT 11:59:16
Egypt Today, egypt today

Hyundai shipbuilding stocks plunge on grim earnings forecast

Egypt Today, egypt today

Egypt Today, egypt today Hyundai shipbuilding stocks plunge on grim earnings forecast

The South Korean firm has struggled amid an industry-wide slump in recent years.
Seoul - Egypt Today

Shares in Hyundai Heavy Industries plunged by more than a quarter on Wednesday after the world's largest shipbuilder by sales announced a plan to issue new stocks in a bid to shore up its ailing finances.

The South Korean firm has struggled amid an industry-wide slump in recent years, as global demand slowed and competition from China intensified while overcapacity slashed prices.

Hyundai announced on Tuesday the plan to raise 1.3 trillion won ($1.2 billion) by issuing new shares -- a move that would dilute share values -- and to list Hyundai Oilbank, its refining unit, on a local stock market next year.

It also released on Tuesday a grim earnings forecast for this year, in which its sales would be more than halved to 15.3 trillion won from 39.3 trillion won in 2016, before falling further to 13.6 trillion won in 2018.

The forecast also flagged operating profit of 46.9 billion won for 2017 -- a significant decrease from 1.6 trillion won a year ago -- sparking concerns over its overall finances.

The news sent Hyundai shares plummeting 29 percent, close to the daily limit of 30 percent, to finish at 96,900 won in Seoul, while the share price of its subsidiary Hyundai Mipo Dockyard also fell by 16 percent.

Hyundai Heavy Industries said the capital raised by the share increase and the initial public offering of the refinery unit would be used to cover operating costs as well as for research and development.

- 'Big Three' under pressure -

South Korea's so-called "Big Three" shipbuilders including Hyundai, Daewoo and Samsung Heavy Industries were once hailed as a major driver of the country's export-reliant economy -- the world's 11th largest.

But they have been forced to shed tens of thousands of jobs and sell assets in recent years as a slump in oil prices and global economic slowdown sapped demand for tankers and container ships.

Overcapacity, regional rivalry and the emergence of cheaper Chinese shipbuilders have also squeezed profit margins.

Daewoo Shipbuilding & Marine narrowly avoided collapse this year by a $2.6-billion lifeline from state-run lenders.

Samsung Heavy also announced earlier this month a plan to raise about $1.4 billion in a sale of new shares after flagging bigger-than-expected operating losses for this year and the next.

Tuesday's annual earnings forecast by Hyundai suggests the firm racked up operating loss of at least 361 billion won in the fourth quarter, said Hwang Eo-Yeon, shipbuilding analyst at Seoul-based Shinhan Investment.

"The grim announcement by Hyundai, on top of the bad news from Samsung, will worsen investor sentiment over the industry for a while," Hwang said, slashing the outlook on Hyundai from "buy" to "neutral".

Yoo Seung-Woo, analyst at SK Securities, said the rising price of global steel sheets -- a key component to build ships -- further dealt a blow to the industry suffering from falling orders, describing shipbuilders' losses as "inevitable".

Samsung earlier this month also blamed the recent price hike of steel sheets as a reason for falling profit margin.

"Hyundai's latest announcement confirmed growing concerns that have been brewing among investors," Yoo said, adding it would be "unavoidable" for Hyundai to post operating losses throughout next year.

 

Source: AFP

egypttoday
egypttoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

hyundai shipbuilding stocks plunge on grim earnings forecast hyundai shipbuilding stocks plunge on grim earnings forecast



Egypt Today, egypt today Modern colorful bedroom renovation

GMT 12:15 2017 Thursday ,21 December

Modern colorful bedroom renovation
Egypt Today, egypt today Paris Fashion Week: John Galliano goes co-ed on the catwalk
Egypt Today, egypt today For the Variety of Interior Design Styles

GMT 22:35 2017 Tuesday ,19 December

For the Variety of Interior Design Styles

GMT 11:07 2011 Wednesday ,08 June

Nearly a quarter of U.S. flights late in April

GMT 11:44 2016 Saturday ,10 December

Vijay ton propels India to 348-6 in fourth England Test

GMT 14:58 2017 Tuesday ,22 August

Sisi follows up on Giza Pyramids area

GMT 01:15 2017 Sunday ,19 February

Bahrain, Turkey pull closer with 5 accords

GMT 12:55 2017 Thursday ,09 November

AQUARIUS (January21st-February19th)

GMT 12:49 2017 Monday ,16 October

10 Kurd fighters dead in clashes with Iraq forces

GMT 16:25 2016 Monday ,11 July

Bangladesh bans Naik’s Peace TV

GMT 11:44 2016 Friday ,01 January

In Israel, Hitler's 'Mein Kampf' an enduring taboo

GMT 17:59 2011 Saturday ,26 March

Little Big Man: Volvo S60

GMT 13:26 2017 Sunday ,19 February

We seek to solve al-Raja crisis

GMT 20:12 2011 Tuesday ,10 May

FIFA probes Malaysians over global match-fixing

GMT 03:41 2016 Tuesday ,28 June

Sweeps 'Bollywood Oscars'

GMT 04:30 2013 Wednesday ,28 August

Ayoon Wa Azan (No to remaining silent to abuse)

GMT 11:37 2017 Tuesday ,03 October

Oil outputs witnessed notable increase this month

GMT 15:51 2017 Friday ,10 March

“March 8 Is Becoming Like Valentine’s Day”

GMT 12:42 2011 Wednesday ,23 November

Philippine govt tightens screening for foreign students

GMT 07:15 2011 Monday ,22 August

Miner Xstrata faces climate test case in Australia
 
 Egypt Today Facebook,egypt today facebook  Egypt Today Twitter,egypt today twitter Egypt Today Rss,egypt today rss  Egypt Today Youtube,egypt today youtube  Egypt Today Youtube,egypt today youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

egypttoday egypttoday egypttoday egypttoday
egypttoday egypttoday egypttoday
egypttoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
egypttoday, Egypttoday, Egypttoday