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News ID: 80381 |
Publish Date: 08:31 - 18 May 2019

DSME profit slides as HHI workers strike over merger

Higher costs weighed on profits while the previous corresponding period had a high base owing to a one-off gain, DSME said. HHI workers continue to protest against feared job losses from the merger as the company is about to be split into two entities.

Recent deliveries of drillships and an order backlog for LNG carriers is expected to boost earnings in the future.

THE merger of major South Korean yards Daewoo Shipbuilding & Marine Engineering and Hyundai Heavy Industries continues to be fraught with difficulties, with the former reporting a 14% drop in first-quarter net profit to Won195bn ($163m) as sales declined. Meanwhile, unionised workers at HHI staged a partial strike against the merger.

Turnover fell 8.2% to Won2.07trn, DSME said in a stock market announcement. Higher raw material costs also weighed on the results, however recent deliveries of drillships, and a solid order backlog for LNG carriers is expected to boost earnings in the future.

Yonhap news agency reported that the workers held the action to protest against a plan to split up the company as part of the merger process. The four-hour strike took place at HHI headquarters in the industrial city of Ulsan.

The workers plan to stage four-hour strikes until next Tuesday before pushing ahead with an eight-hour strike on Wednesday.

As part of a plan to merge with DSME signed in March, HHI plans to split the company into two entities, which the union claims will lead to massive job cuts.

The company said production would not be seriously affected by the latest strike action but it may take legal action against the union if it turns out to be illegal.

HHI workers have previously protested against the merger and expected job losses to little avail.

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