South Korean shipbuilder Hyundai Samho Heavy Industries, a subsidiary of Hyundai Heavy Industries (HHI), has clinched orders for five VLCCs from the National Shipping Company of Saudi Arabia (Bahri).
The contract was signed on 21 May, announced Bahri, which added that the contract came with options for another five VLCCs.
The320,000 dwt VLCCs are reportedly priced at around USD100 million each, meaning the total contract could be worth USD1 billion if the options are exercised.
Bahri said the tankers would be delivered during 2017. The financial impact of these contracts will appear after the delivery of the vessels.
Bahri said, “These VLCCs are designed to the latest international technical specifications and are fitted with environmentally friendly specifications and high efficiency in fuel consumption, with a capacity of 300,000 dwt per carrier. The signing of these contracts is for continuous renewal of the current fleet to meet the needs of the local and global markets.”
HHI, which suffered a record loss of KRW2.8 trillion for 2014, appears to be rebounding with the recovery in tanker freight rates. The upswing, brought about by the drop in oil prices, has prompted shipowners to invest in VLCCs.
HHI’s compatriot rivals Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering are said to have lost out, as both yards are fully booked until 2017.
CIMB Securities’ analyst KJ Hwang said, “We expect HHI to continue securing quality commercial ship orders with stronger margin prospects. While HHI appears to be selectively bidding for the profitable contracts, we expect quality orders to gather stronger pace in the second quarter of 2015 [like mega-container ships from Maersk], as the golden slots for fiscal year [FY] 2016/17 deliveries run out [VLCCs and 20,000 teu container ships are currently built at the same docks].