By Kyunghee Park

(Bloomberg) — Daewoo Shipbuilding & Marine Engineering Co., the world’s second-biggest shipbuilder, posted a report loss final 12 months because it wrote down extra prices from offshore tasks below building.

The internet loss together with minority pursuits totaled 5.13 trillion gained ($4.3 billion) in 2015, in contrast with revenue of 33 billion gained a 12 months earlier, the Seoul-based firm mentioned in a regulatory submitting Monday. Sales fell 23 p.c to 13 trillion gained.

Daewoo Shipbuilding is amongst world shipyards that have been pushed to losses in 2015 after a foray into building of floating drilling and manufacturing items coincided with a plunge in oil costs to the bottom ranges in additional than a decade. The firm, the worst performer in 2015 amongst shares on the Kospi 200 Index, has mentioned it goals to submit a revenue this 12 months given that almost all offshore tasks during which it has incurred losses are anticipated to be delivered in 2016.

“Earnings are expected to turn around this year as more high-valued gas carriers are built,” Daewoo Shipbuilding mentioned in an e-mailed assertion. “The company has sufficiently set aside provisions that will eliminate any uncertainties.”

Annual Loss

Shares of Daewoo Shipbuilding rose 14 p.c to shut at 6,040 gained Monday earlier than the outcomes. The inventory has fallen about 70 p.c up to now 12 months, in contrast with a 2.7 p.c decline within the benchmark Kospi index.

Daewoo Shipbuilding posted a full-year working lack of 5.51 trillion gained, in contrast with revenue of 471.1 billion gained in 2014.

The fourth-quarter internet loss together with minority pursuits narrowed to 979.8 billion gained from a lack of 1.69 trillion gained within the third quarter, the corporate mentioned. Daewoo Shipbuilding posted an working lack of 973.3 billion gained within the three months, narrowing from 1.45 trillion gained within the third quarter.

Oil costs have dropped greater than 30 p.c over the previous 12 months amid volatility in world markets, brimming U.S. crude provides and an expectation of elevated provide from Iran. That prompted oil corporations, comparable to Statoil ASA and Royal Dutch Shell Plc, to chop spending and led rig house owners to cancel orders or ask for supply delays.

Brent traded at $39.35 a barrel as of two:48 p.m. in Singapore Monday.

Ship Fund

The South Korean authorities mentioned in December it plans to work with banks to arrange a $1.2 billion fund to assist native transport corporations pay for brand spanking new vessels they’ve ordered, in keeping with the Ministry of Oceans and Fisheries. The authorities additionally will push shipyards to downsize and deal with their core companies, and can search to shut or promote yards that may’t survive on their very own.

Major collectors Korea Development Bank and Export-Import Bank of Korea pledged in October to offer 4.2 trillion gained to Daewoo Shipbuilding in loans and fairness. The firm additionally plans to lift 750 billion gained by promoting non-core belongings comparable to its headquarters constructing and a golf course.

The collectors’ due diligence discovered that Daewoo Shipbuilding may face a extreme money scarcity within the first half of this 12 months, however that might ease because the shipyard receives funds on drill ships it is going to ship, Korea Development Bank mentioned in October.

© 2016 Bloomberg L.P