Daewoo Shipbuilding wins order for five ultra-large container ships from Mediterranean Shipping

2019-10-18 09:00

On October 15, Daewoo Shipbuilding & Marine Engineering (DSME) in South Korea announced it had received orders for five container ships, with a total value of approximately 903.9 billion South Korean won (approximately US\$763 million).

DSME did not disclose the specific information of the ship owner and the vessels, but stated that these five container ships will be delivered before August 2021. However, there are reports that this order comes from Mediterranean Shipping Company (MSC), including five 23,000 TEU ultra-large container ships, each costing approximately US\$152 million, and will be equipped with exhaust gas scrubbers.

Reports suggest that despite falling freight rates and weak trade growth, a new sign indicates that shipping companies are still increasing capacity. A spokesperson for MSC stated that MSC has some alternative vessel arrangements with DSME related to previous orders, but MSC has not yet confirmed the new order.

It is understood that in September 2017, MSC ordered a total of 11 23,000 TEU ultra-large container ships from Samsung Heavy Industries and DSME. Among them, the six container ships built by Samsung Heavy Industries will be equipped with exhaust gas scrubbers, each costing US\$138 million, and will be delivered this year; the other five built by DSME will operate on LNG power, each costing approximately US\$163 million, and will be delivered successively starting in March 2020.

On October 11, DSME just announced that it had received contracts for two LNG carriers and one submarine, with a total value of approximately US\$1.3 billion, bringing its order intake this year to US\$4.27 billion, accounting for 51% of its annual order target of US\$8.37 billion, becoming the second among the three major shipbuilders in South Korea to complete more than half of its annual order target after Samsung Heavy Industries.

With the latest five container ships, DSME's order intake this year has further increased to US\$5.033 billion, reaching 60% of its annual target. To date, DSME has received a total of nine LNG carriers, seven VLCCs, four submarines, and five container ships this year.

As of now, DSME's sales in the first half of this year reached 4.2 trillion South Korean won (approximately US\$3.542 billion), with an operating profit of 394.4 billion South Korean won (approximately US\$333 million).

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