South Korea’s Daewoo Shipbuilding & Marine Engineering Co. (DSME) swung back to a profit in 2017 after six years of money-losing, much thanks to stringent cost-cutting endeavors in return for a 6.7 trillion won fresh bailout from creditors in March.

The Korean shipbuilder announced in a regulatory filing on Monday that it posted 733 billion won ($688 million) in operating profit in full 2017, reversing from an operating loss of 1,531 billion won a year ago. Its bottom line also swung back to profit of 669.9 billion won over the same period even as sales fell 13.4 percent to 11.10 trillion won.

The company reported profits on a consolidated basis last year for the first time since 2011.

For the October-December period, the company reported 351 billion won in operating loss, reflecting provisions against losses on ship construction.

DSME shares Tuesday ended 1.81 percent down at 27,150 won from the previous session.

DSME attributed its improvement to a sharp fall in labor cost following its massive restructuring taken since 2015. The shipyard was saved through a fresh debt relief and came under prosecution probe for accounting fraud for hiding massive deficits from creditors and investors.

Regardless of a 4.2 trillion won bailout extended by Korea Development Bank (KDB) and Export-Import Bank of Korea in 2015, the two state banks had to pull together another $6 billion debt relief program last year. As result, its debt ratio significantly slipped to 281 percent at the end of last year from 2,185 percent a year ago.

As part of its self-rescue plan, DSME has also improved efficiency in ship manufacturing and delivering systems, which has allowed it to deliver five units of offshore plants to owners without delay last year, enabling the company to get full payment from ship owners on schedule and successfully avoid compensation for project delays.

The company expects it would do better this year on recovering demand for liquefied natural gas (LNG) vessels. Daewoo Shipbuilding said in a separate filing that it targets to earn 10 trillion won in sales this year, above the market consensus of 9.1 trillion won, with $7.3 billion worth orders. It expects to obtain new orders of at least 10 LNG carriers this year.

By Woo Je-yoon and Lee Ha-yeon

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