SEOUL: The world’s largest shipbuilder, Hyundai Heavy Industries, posted its first net profit for more than two years in the first quarter, despite an extended global slump in the shipbuilding sector.
The South Korean company said Tuesday that net income for the January-March period stood at 244.5 billion won ($213 million), compared to a loss of 125.2 billion won a year earlier.
“We’ve succeeded in shifting to the black for the first time in 10 quarters through intense corporate restructuring,” it said in a statement.
The overhaul included spinning off unprofitable businesses and cutting costs across the board.
Hyundai Heavy said the first quarter performance was boosted by lower raw material prices, a weaker Korean currency and “substantial improvement” in sectors aside from shipbuilding—including heavy engines, electric and electronics goods and construction equipment.
Asian shipbuilders had a brutal year in 2015 as low oil prices, overcapacity and lower freight rates hit nearly every shipbuilding sector.
South Korea’s financial regulator laid out the problems in a briefing to journalists on Tuesday.
“Last year, the overall value of ship orders clenched by local shipbuilders stood at $10 billion,” said Financial Services Commission (FSC) Chairman Yim Jong-Yong.
“But this year, new orders have nearly dried up, overwhelming shipbuilders’ ongoing self-rescue efforts,” Yim said.
South Korean shipbuilders are expected to lay off up to 20,000 workers as restructuring efforts kick in.