Shipbuilder predicts higher sales

HYUNDAI Heavy Industries Co, the world's biggest shipbuilder, forecast sales this year will rise 16 percent to a record as it accepts more orders at higher prices for vessels to carry consumer goods and liquefied natural gas, Bloomberg news reported on Monday.

Sales may climb to 18.06 trillion won (US$19 billion) from 15.6 trillion won this year, Ulsan, South Korea-based Hyundai Heavy said in a regulatory filing. It expects orders to rise 1.8 percent to US$27.4 billion this year.

Yards in South Korea, the world's largest shipbuilding nation, may report record earnings for 2007 on demand for vessels to transport raw materials to China and finished goods to the rest of the world. Hyundai Heavy is expanding production capacity to work through an order backlog.

"Earnings will continue to increase in 2008 as shipyards build more pricier vessels," said Song Jae Hak, an analyst at Woori Investment & Securities Co in Seoul. Song has a "buy" recommendation for Hyundai Heavy shares.

Ship prices, rising since 2003 from a 10-year low, have more than doubled to a record as global economic growth increased demand for consumer goods and raw materials, according to Clarkson Plc, the world's biggest shipbroker. South Korean yards are now building vessels from contracts they won in 2004 and 2005.

Source:RamblerNews