SEOUL, KOREA - Sungdong Shipbuilding, a Korean shipbuilder located in Tongyeong in South Gyeongsang Province, is on track toward normalization after falling prey to financial difficulty during the 2008 global financial crisis. At the time, it suffered a massive amount of losses due to foreign currency derivatives such as the "knock-in knock-out" option.
According to Korea EximBank, a major creditor bank of the shipyard, Sungdong Shipbuilding has received orders for four tuna fishing vessels plus nine bulkers this year. In addition, the company is now in talks with Norway's Frontline for construction of four 8,800 TEU containerships. The value of these contracts is estimated at $330 million. Given that it received orders for only three ships last year, this year's performance is remarkable.
Sungdong Shipbuilding' financial conditions, accordingly, are improving. The amount of financial support given by its creditor banks fell to 20 billion won this year from 890.7 billion won in 2012, 849.3 billion won in 2011, and 240.7 billion won in 2010. It also expects to achieve operating profits this year, in a dramatic turnaround from the losses of 1,139 billion won in 2008, 465.3 billion won in 2010, and 178.1 billion won in 2012.
