Daewoo Shipbuilding & Marine Engineering Co aims to secure newbuilding orders worth $8.9bn in 2022, up 15% from a year ago.
The company said it has already secured orders this year worth $2.72bn, or 30% of its annual target, according to a regulatory filing.
Last year DSME, the world’s fourth-largest shipbuilder by order backlog, achieved $10.8bn worth of orders helped by increased demand for LNG carriers and container ships.
Fearnley Securities said DSME’s backlog has continued to grow, now standing at nearly $26bn versus the exit value in 2020 of $18.7bn.
“With yards now largely full to commence new work for the next years and seemingly reluctant to add new business on current prices with delivery several years ahead it will be interesting to see how pricing plays out in the coming year,” analysts Peder Nicolai Jarlsby, Erik Gabriel Hovi and Ulrik Mannhart said.
“LNG carrier capacity is likely to be the focus amid a likely acceleration in new final investment decisions as Europe looks to diversify its natural gas supply away from Russia.”
In early March DSME posted a heavy loss of KRW 1.7trn ($1.4bn) for 2021, but believes its future earnings will improve due to the orders secured last year surpassing targets for the next three years.
The Fearnley Securities analysts said that yards are still struggling on current earnings/margins due to legacy contracts and due to the lion’s share of income only being recognised on delivery.
Earlier this year, the European Union blocked a planned $1.8bn merger between DSME and HD Hyundai, previously known as Hyundai Heavy Industries Holdings.
The EU competition authorities said a merger of the two companies would result in them dominating the market for LNG carrier newbuildings.
