South Korea’s Daewoo Shipbuilding & Marine Engineering Co. (DSME) was able to eke out a profit in the first quarter despite still-slow business thanks to cost-cutting endeavors and sales of cancelled offshore drilling facility.

DSME said in a regulatory filing on Tuesday that it raked in 298.6 billion won ($276.7 million) in operating profit for the January-March period, up 33.7 percent from a year ago and swinging back to profit from the previous quarter. Sales, however, fell 17.4 percent to 2.26 trillion won year over year while net income slid 3.1 percent to 226.3 billion won.

On Wednesday, shares of DSME ended down 2.22 percent at 26,450 won from the previous session.

The company mainly attributed its gain in operating profits to the ongoing restructuring efforts to reduce costs and debts. Total liabilities have decreased by 686.5 billion won from the end of December to the end of March, allowing its debt ratio to drop to 234 percent from 283 percent over the cited period.

“The company will keep up efforts to increase profits by reducing costs and enhancing productivity,” said a DSME official.

Revenue from a drillship sale also helped expand profit, the company added. DSME recently sold two units of drillship, whose original contract was terminated, to another international drilling contractor Northern Drilling Ltd. for $600 million. It also received a raise in upfront payment after a successful delivery of an offshore plant to its owner.

The company’s business is expected to improve onwards. It has recently clinched a $260 million deal to build three units of very large crude oil carrier (VLCC) for Norway-based Hunter Tankers under Hunter Group. With the latest deal, it has bagged a total of $2.6 billion in orders so far this year, which is equivalent to 36 percent of its annual sales target of $7.3 billion.

By Woo Je-yoon and Lee Ha-yeon

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