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DSME eyes bumper Q4, likely to meet annual order target for this year

South Korea’s Daewoo Shipbuilding & Marine Engineering (DSME) is expected to meet its annual order target thanks to a winning streak in the second half.

DSME reportedly is near signing a contract with Japanese shipping firm Iino Lines to build one 91,000-cubic-meter Very Large Gas Carrier (VLGC) plus an option to build another VLGC vessel, according to multiple foreign media outlets on Thursday. A VLCC of the same class costs around $80 million.

The Japanese client reportedly is placing the shipbuilding order to carry liquefied petroleum gas for Austrian chemical company Borealis AG.

DSME is also after to a $1.16 billion deal with Monaco’s Scorpio Bulkers Inc. to build offshore wind farm vessels within this year.

DSME and Scorpio Bulkers in July entered into a letter of intent for constructing one wind turbine installation vessel plus options to build up to three additional units. Market watchers have predicted the two parties would sign the final contract by the end of this year.

The value of each vessel is estimated to reach up to $290 million, depending on final design modifications. If DSME ends up constructing all four vessels, it would bag $1.16 billion at most.

If DSME secures the two contracts, it would achieve 64 percent of this year’s order target.

So far, DSME has met 46 percent of its annual order target by obtaining deals to construct total 13 vessels, worth $3.3 billion. New orders the Korean shipbuilder won this year include six liquefied natural gas carriers and two very large crude carriers.

Its performance is well above local rivals. Korea’s largest shipbuilder Korea Shipbuilding & Offshore Engineering Co. and another major shipyard Samsung Heavy Industries Co. have achieved only 30 percent and 12 percent, respectively, of their annual order targets.

On Thursday, DSME shares finished 0.87 percent lower at 22,900 won ($20.19).
Source: Pulse

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