| Hyundai Mipo Dockyard on course for profit |
| South Korean mid-tier shipbuilder Hyundai Mipo Dockyard (HMD) can look forward to a profitable 2015 as the costs of raw materials decrease, analysts said on 29 April. HMD posted a KRW22.49 billion (USD21 million) profit on 28 April for the first quarter of 2015, reversing a KRW34.87 billion loss for the first quarter of 2014. Samsung Securities analyst Han Young-soo explained HMD’s better performance was a result of favourable forex rates, falling steel plate prices, and strong performances by financial subsidiaries HI Investment & Securities and HI Asset Management. While Daishin Securities estimates HMD could earn a KRW132 billion profit for 2015, reversing a KRW633 billion loss for 2014, it sees little upside for the shipbuilder’s stock price. Daishin Securities analyst Feynman Jeon said, “Orders remain weak for product carriers and mid-sized LPG carriers, which are HMD’s core products. “The prices of these vessel types are forecast to decline. Earnings could slow again in the second half of 2016 as the company starts to recognise sales from 2015 orders.” HMD, known for its eco-type medium-range (MR) product tankers, netted its first-ever long-range (LR) product tanker order when Italian product tanker specialist D’Amico ordered two 75,000 dwt LR1 tankers at HMD’s Hyundai-Vinashin shipyard this week. Still, CIMB Securities analyst KJ Hwang said this shows HMD’s appetite to expand its product tanker offerings in anticipation of refining capacity growth in the US, India, and the Middle East. HMD’s stock closed at KRW88,600 on 29 April. The stock price is up 31% year on year due to a better outlook for tanker earnings. For the first quarter of 2015, HMD won USD290 million worth of orders, attaining 10% of its 2015 target. |