Mangalia in the red

Daewoo Mangalia Heavy Industries (DMHI) shipyard, the biggest shipyard in Romania, last year recorded losses worth 18.5 million euros despite a 46% increase in its turnover. DMHI slipped into the red mainly because of the increase in the price of sheet metal according to a statement by the company management. In 2004, the shipyard had posted a net profit of 5.7 million euros, with turnover standing at 109.1 million euros. DMHI business rose to 159.2 million euros last year.

Iulian Sandu, DMHI’s general business manager explained “We went in the red mainly because of an excessive increase in the price of sheet metal beyond expectations. We generally close contracts for sheet metal four years before the construction is to start, and when we closed these contracts the price of sheet metal for shipbuilding was around 250 euros/tonne, although, we estimated it could rise to almost 510 euros/tonne. But when we actually bought the metal sheet, the price stood at some 700 euros/tonne.”