Samsung Heavy Industries names Joonou Nam new CEO — days after it forecast a fourth straight year of losses

  • South Korea's Samsung Heavy Industries named Joonou Nam as its new CEO on Monday
  • The shipbuilder's previous leader, Park Dae-young, resigned to take responsibility for the firm's losses
  • Samsung Heavy last Wednesday forecast a fourth straight year of operating losses, prompting a near 30 percent slide in its shares on the same day

South Korea's Samsung Heavy Industries named Joonou Nam as its new chief executive officer on Monday after Park Dae-young resigned to take responsibility for the firm's losses.

Nam previously oversaw Samsung Heavy's shipyard in Geoje, South Korea.

The downturn in trade saw many shipping firms around the world struggling to book profits.
Andy Clark | Reuters
The downturn in trade saw many shipping firms around the world struggling to book profits.

The shipbuilder last Wednesday forecast a fourth straight year of operating losses and announced a rights issue to lessen the risk of tighter credit conditions, prompting a near 30 percent slide in its shares after the announcement.

The company's $1.4 billion new share issue, which follows a $1 billion issue in 2016, will be used to pay debt as well as to reduce the risk of banks curtailing lending due to its weak earnings prospects, Samsung Heavy said in a statement last week.

South Korea's three shipbuilders — the world's biggest — have racked up billions of dollars in losses and embarked on major restructuring as customers slashed orders amid a commodities downturn and a drop-off in shipping trade. They also have to fend off stiff competition from Chinese and Japanese rivals.

Samsung Heavy — the smallest of the three — said in a filing it expected an operating loss of 240 billion won ($220 million) in the next financial year, after an expected loss of 490 billion won this year — the result of weak orders and a failure to reach its targets to cut headcount and other costs.

The other two shipbuilders are Daewoo Shipbuilding & Marine Engineering and Hyundai Heavy Industries.

Shares of Samsung Heavy have since recovered, inching by around 2 percent on Monday at 9:45am HK/SIN.