The creditors decided to keep the workout (corporate financial structure improvement process) for Busan-based mid-sized shipbuilder Daesun Shipbuilding & Engineering Co. in the second half as well. Although Daesun Shipbuilding & Engineering Co. is faithfully carrying out its self-rescue plan, the creditors judged that expense reductions and revenue expansion are necessary.
According to the financial sector on the 21st, the creditors recently finalized the results of the first-half evaluation of Daesun Shipbuilding & Engineering Co.'s implementation of its self-rescue plan.
According to the creditors, Daesun Shipbuilding & Engineering Co.'s order intake in the first half of this year was at a solid level. It won 17 ship orders, reaching 85% of the target. For block (structures needed to build ships) orders, it achieved 100% of the target. The backlog of block orders, which stood at four ships at the end of last year, increased to 15 ships in the first half of this year. Daesun Shipbuilding & Engineering Co. is shifting its main business to block fabrication.
The workforce restructuring reached 134% of the target, and reductions in material and administrative expenses exceeded the target at 112%, respectively. Results are also improving. Last year's sales rose 17.1% from the previous year to 322.5 billion won, and the deficit narrowed to 5.5 billion won. In the first half of this year, it posted sales of 132 billion won and an operating profit of 2.8 billion won, successfully returning to the black.
Daesun Shipbuilding & Engineering Co. is also proceeding with the sale of the Yeongdo shipyard it owns. As the United States has been focusing on the "MASGA (Make American Shipbuilding Great Again)" project based on Korea-U.S. cooperation, multiple corporations are reportedly showing interest in acquiring the Yeongdo shipyard. The core of the MASGA project is cited as the U.S. naval vessel maintenance, repair and overhaul (MRO) business, and industry analysis holds that the Yeongdo shipyard is suitable for MRO. The creditors assessed that Daesun Shipbuilding & Engineering Co. is cooperative regarding the sale of the Yeongdo shipyard.
However, the creditors said, "Uncertainties remain regarding delays in certain processes for ordered ships, the potential decline in the contribution margin of block fabrication, and the feasibility of the workforce restructuring plan," and noted, "Ongoing efforts are required to improve cash flow through the company's expense reductions and revenue generation."
Daesun Shipbuilding & Engineering Co. entered a workout after posting a loss of 160 billion won in 2023. Dongil steelux, an affiliate of the Hwain Group, is the largest shareholder with 45.1% equity in Daesun Shipbuilding & Engineering Co.