Daewoo Shipbuilding targets $9 billion earnings in 2018

Daewoo Shipbuilding Marine & Engineering Co., the world’s second-largest shipbuilder by orders, is expecting to earn about $9.1billion in sales this year.

Chief Executive Officer of the company, Jung Sung-leep, also said he expected Daewoo Shipbuilding to receive $7 billion worth of orders by the end of this year, which is close to the initial order target of $7.3 billion.

“We are making efforts to secure orders for offshore facilities for the rest of the year, which if realized, could help us surpass the order target,” Jung said during a news conference at the company’s headquarters in central Seoul.

As of the end of May, the shipbuilder had $22.4 billion worth of orders, or 96 ships, in its order backlog, which would keep its shipyards busy until the third quarter of 2020. Still, he identified rising shipbuilding plate prices and the won’s strength against the dollar, which affects the vessels’ export prices, as major challenges ahead for the company’s bottom line.

Jung also expected the shipbuilder to deliver two drill ships to Sonangol by the end of this year, citing a change in the management of the Angolan state oil firm.

“The Angolan president appears to have instructed Sonangol to receive the ships within this year,” Jung said.

The delivery had been originally scheduled for June and July in 2016 but was delayed due to Sonangol’s worsening financial status.

Jung also said he plans to sell off two affiliates — Shinhan Heavy Industries Co. and Samwoo Heavy Industry Co.

Daewoo Shipbuilding said it hopes to sell Samwoo Heavy, which makes ship parts and on/off shore products, at around 20 billion won as some firms expressed interest in buying the company, though it did not provide details.