South Korea’s Daewoo Shipbuilding & Marine Engineering (DSME) reported net loss of KRW 668bn ($509m) for the first half of this year amid rise in newbuilding contracts, according to Yonhap news. However, the loss amount was half of KRW 1.24trn which it logged for the same period in 2021. The shipyard reported an operating loss of KRW 570bn, down from KRW 1.22trn form a year ago. But it saw its revenue increase by 12% to KRW 2.42trn from the first half of 2021. For the second quarter of 2022, DSME reported an operating loss of KRW 99.5bn and net loss of KRW 176bn, down 78% and 64% respectively from the previous quarter.

The shipyard said that “while the losses have sharply narrowed from the first quarter, the company continued its losses due to sanctions against Russia and labour strikes”. The conflict between Russia and Ukraine has led to the cancellation of two of three LNG carrier orders from Russia worth around KRW700bn at the yard. The remaining LNG ship is also at the risk of being terminated.

The debt-ridden yard was hit by a 51-day labour strike that started in early June. DSME estimated the aggregate operating loss from the prolonged strike to be more than KRW 800bn. On a positive note, DSME said it has received $6.67bn worth of newbuildings orders this year. The contract volume is about 75% of its annual order target of $8.9bn.

On 12 August, DSME disclosed that it has received an order for a single 174,000-cbm LNG carrier newbuilding from an Asian owner worth about $240m. It is slated to deliver the gas carrier in the second half of 2026. The Okpo-based shipbuilder said the eco-friendly newbuilding will be fitted with a low-pressure dual-fuel ME-GA engine and an on-board re-liquefaction facility that will significantly reduce emissions. The name of the buyer was not disclosed. However, shipbuilding sources believed Japan’s Mitsui OSK Lines (MOL) was behind the contract. The contract would be MOL’s second deal with the shipyard this year if confirmed. In April, it was reported to have signed up for two vessels to be delivered by the second half of 2026 at $213m each.

Daewoo Shipbuilding was reported to have received orders for 21 LNG carriers so far this year, up from 15 in the whole of last year.