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S. Korean shipyards to pay bonuses despite huge losses

All News 09:28 January 22, 2016

SEOUL, Jan. 22 (Yonhap) -- South Korean shipbuilders, reeling from massive losses, are planning to pay bonuses to their employees for the Lunar New Year's holiday, as part of efforts to boost morale, industry sources said Friday.

According to the sources, Hyundai Heavy Industries Co., Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co. are set to pay one-off bonuses to employees, amounting to 100 percent of their basic monthly salaries.

The Lunar New Year's falls on Feb. 8 this year, with a five-day break.

Last year, some 3,000 workers left the shipyards as local shipbuilders struggled with mounting losses stemming from a delay in the construction of offshore facilities and a protracted slump in the sector.

Hit by a protracted slump in oil prices and increased costs, the shipbuilders are estimated to have racked up a combined operating loss of more than 8 trillion won (US$6.59 billion) last year. If the figure hovers around that level, it will mark the first time for all of the nation's three largest industry players to register operating losses.

In 2014, their combined operating losses hovered above 2 trillion won.

Market watchers expect their business slump to continue this year as the global shipbuilding industry is unlikely to turn around any time soon.

The stuttering shipbuilding sector is feared to be a major drag on South Korea since it is one of the key growth engines for Asia's fourth-largest economy, along with electronics and automobiles.


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