Major shipyards ' ratings cut on falling new orders , dim outlook SEOUL , April 5 ( Yonhap ) -- South Korea ' s major shipyards saw their ratings cut for their falling new orders and worsening financial status , industry sources said Wednesday . According to the sources , KIS Ratings lowered its rating on Hyundai Heavy Industries Co . to " A -" from " A , " citing a protracted industrywide slump , severe competition , falling new orders and lower shipbuilding prices . Late last month , Korea Ratings also trimmed its rating on Hyundai Heavy to " A " from " A -," the lowest in 15 years . Its rating on Samsung Heavy Industries Co . was also cut to " BBB +" from " A -." Hyundai Heavy managed to swing back to the black last year , while the two others were still mired in the red . Korea Ratings said Hyundai Heavy will see its sales start declining in 2018 , and a fall in shipbuilding prices and increased costs will prevent the shipyard from posting a meaningful recovery down the road . " Although restructuring moves are currently under way for the local shipbuilding industry , there are still concerns about a decline in new orders amid falling order backlogs , " it said . " Such uncertainties will continue for a while , which means their business performance will face increased volatility . " The local shipyards have been struggling with a drop in new orders amid a supply glut . The combined annual new orders clinched by the country ' s big three shipbuilders stood at some US $ 10 billion last year , sharply down from $ 24 . 3 billion in 2015 , $ 42 billion in 2014 and $ 54 . 3 billion in 2013 , as low oil prices and a slowdown in the global economy reduced demand for new ships . For one , Daewoo Shipbuilding bagged a meager $ 1 . 55 billion in new orders last year , compared with $ 4 . 5 billion in 2015 and $ 14 . 9 billion in 2014 . The shipyard received massive financial aid from its creditors through a debt - for - equity swap and the sale of perpetual bonds in 2015 , which helped dress up its balance sheet without any cash inflows . But its creditors , led by the state - run Korea Development Bank , recently have drawn up a fresh rescue package worth 6 . 7 trillion won for the shipyard whose cash flows have worsened further . sam @ yna . co . kr ( END )