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| (출처=BHI) |
[Alpha Biz= Reporter Kim Sangjin] BHI, the manufacturer of power plant boilers, has terminated a 230 billion KRW supply contract signed last year. The company stated that they are currently in discussions with the prime contractor for renegotiation due to issues with an intermediary.
According to industry sources on the 3rd, BHI recently terminated a 232.2 billion KRW contract for power plant equipment (boilers for thermal power generation) with Formosa Heavy Industries Corporation, Taiwan, signed in March last year. Under this contract, BHI's boilers were to be delivered for a project undertaken by SMCGPH, a power company in the Philippines, which entrusted the engineering, procurement, and construction (EPC) responsibilities to Formosa Heavy Industries. Formosa Heavy Industries had ordered the boilers from BHI for this project.
This contract accounts for 98.99% of the consolidated revenue based on the 2021 fiscal year (234.8 billion KRW). The previous fiscal year 2022 reported this revenue as the contract was submitted on the date of signing. The contract is scheduled to run until May 31, 2026. BHI explained that they recognized some revenue from this contract by receiving partial payments last year. According to their business report, BHI received 105 billion KRW out of 362.8 billion KRW in overseas contracts by the end of last year, leaving an outstanding balance of 257.8 billion KRW in overseas orders.
BHI stated, "The termination of this contract follows Formosa Heavy Industries Corporation's recent decision to abandon the project with the prime contractor due to profitability reasons."
Currently, discussions are ongoing with SMCGPH regarding the boiler supply contract. Options under consideration include another vendor taking over the terminated contract for reordering or direct contracting by the prime contractor. However, as confirmation from the prime contractor is still pending, there are concerns about potential adverse effects on revenue and performance.
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
