HD Korea Shipbuilding & Offshore Engineering Co., Ltd.

Company Background

South Korea's Korea Shipbuilding & Offshore Engineering Co., Ltd., or KSOE, is one of the world's largest shipbuilders. Formerly known as Hyundai Heavy Industries, it split it into two, KSOE and newly created HHI, in May 2019. KSOE has become a holding company, putting HHI under its wing.

The company is one of the largest manufacturers in South Korea after Samsung Electronics, Hyundai Motor and others, with annual sales of around 50 trillion won.

Shipbuilding and oil refining are the company's two main sources of revenue. It also conducts business in areas such as offshore and engineering, construction equipment and electro electric systems.

The company's specialization in high-value-added vessels such as liquefied natural gas carriers and drill ships propelled it to the top of the shipbuilding industry in terms of volume years ago. Earnings, however, are precarious because of increased competition from Chinese rivals since the 2008 global financial crisis.

In the year ended December 2014, the company logged its biggest operating loss since its 1973 founding. It is now implementing structural reforms such as consolidating its group businesses, cutting jobs and reducing salaries. Unlike Hyundai Motor, which has a powerful labor union, relations between staff and management at Hyundai Heavy Industries are favorable. However, its unionized workers in 2014 staged their first strike in about 20 years to protest against the structural reforms.

Chung Mong-joon, the sixth son of the Hyundai conglomerate founder Chung Ju-yung, is the company's major shareholder. Chung, who has also served as chairman of the Korea Football Association and a member of the National Assembly, has decisive influence over the management of the company. Chung is expected to pass the baton to his son in the future.

Business Summary

HD Korea Shipbuilding & Offshore Engineering Co., Ltd. engages in the manufacture and sale of steel ships. Its operations are carried out through the following divisions: Shipbuilding, Offshore and Engineering, Industrial Plant and Engineering, Engine and Machinery, Electro Electric Systems, Green Energy and Construction Equipment. The Shipbuilding division main products involve VLCCs, tankers, product carriers, chemical tankers, containerships, bulk carriers, OBO carriers, ro-pax ships, ro-ro ships, pure car carriers, LNG carriers, LPG carriers, submarines, destroyers and frigates. The Offshore and Engineering division has floating units, mixed platforms, pipelines and subsea facilities, offshore installations. The Industrial Plant and Engineering division offers combined cycle power plant, thermal power plant, oil and gas processing plant, LNG plant, refinery plant, petrochecmical plant, process equipment, nuclear component, boiler and HRSG. The Engine and Machinery division provides machine engine equipment, industrial machinery, power plant and robot system. The Electro Electric System offers transformers, GIS, switchgear, low and medium voltage circuit breakers, power electronics, rotating machinery, integrated control and monitoring systems. The company Green Energy division has solar power system and wind turbine system. The Construction Equipment division offers excavators, wheel loaders, backhoe loaders, forklift trucks and skid steer loaders. The company was founded by Chung Ju-Yung on December 28, 1973 and is headquartered in Seoul, South Korea.

Financial Highlights

Dec 2022	KRW	USD
Revenue	18,085.46B	13,996.94M
Gross Profit	1,116.73B	864.27M
Operating income	409,465.40M	316.89M
Income before tax	-399,013.66M	-308.80M
Net income	-216,949.61M	-167.90M
EBITDA	830,641.40M	642.86M
Diluted EPS	-3,067.94	-2.37
Dividends Per Share	0	0
Total Assets	29,883.47B	23,632.64M
Total liabilities	17,571.34B	13,895.88M
Total equity	9,714.91B	7,682.81M
Operating cash flow	845,445.76M	654.31M
	Currency in KRW	Currency in USD

Historical Data

KRW | USD

	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Dec 2022
Revenue	13,119.89B	15,428.90B	15,021.53B	15,509.54B	18,085.46B
Gross Profit	321,376.72M	1,200.56B	824,326.10M	-536,643.81M	1,116.73B
Operating income	-531,672.01M	536,430.61M	191,442.13M	-1,380.22B	409,465.40M
Income before tax	-854,036.98M	71,066.05M	-574,157.85M	-1,620.89B	-399,013.66M
Net income	-677,539.78M	154,377.78M	-833,786.98M	-929,318.92M	-216,949.61M
EBITDA	-136,698.01M	939,622.61M	600,605.13M	-981,496.77M	830,641.40M
Diluted EPS	-8,061.42	2,183.10	-11,790.86	-13,141.75	-3,067.94
Dividends Per Share	0	0	0	0	0
Total Assets	24,729.89B	25,055.37B	25,244.19B	27,293.09B	29,883.47B
Total liabilities	12,047.52B	12,129.05B	12,822.96B	14,879.33B	17,571.34B
Total equity	11,453.63B	11,566.90B	10,906.29B	9,856.55B	9,714.91B
Operating cash flow	-777,611.37M	-1,317.58B	-54,212.45M	735,475.49M	845,445.76M

	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Dec 2022
Revenue	11,921.55M	13,230.24M	12,731.32M	13,543.56M	13,996.94M
Gross Profit	292.02M	1,029.47M	698.64M	-468.61M	864.27M
Operating income	-483.11M	459.98M	162.25M	-1,205.27M	316.89M
Income before tax	-776.03M	60.93M	-486.62M	-1,415.42M	-308.80M
Net income	-615.65M	132.37M	-706.66M	-811.51M	-167.90M
EBITDA	-124.21M	805.72M	509.03M	-857.08M	642.86M
Diluted EPS	-7.32	1.87	-9.99	-11.47	-2.37
Dividends Per Share	0	0	0	0	0
Total Assets	22,163.37M	21,665.76M	23,238.69M	22,959.49M	23,632.64M
Total liabilities	10,797.20M	10,488.18M	11,804.25M	12,516.79M	13,895.88M
Total equity	10,264.95M	10,002.07M	10,039.85M	8,291.53M	7,682.81M
Operating cash flow	-706.58M	-1,129.82M	-45.94M	642.24M	654.31M

Valuation Measures

Dec 2022
PER	--
ROA	-0.75%
ROE	-2.21%
Operating margin	2.26%
Profit margin	-1.19%

Key executives

Vice Chairman & Chief Executive Officer: Sam-Hyeon Gah
President & Director: Ki-Sun Chung
Managing Director & Head-Finance: Jin-Soo Park
Head-Compliance Support: Tae-Jung Kim
Head-Investor Relations: Gi-Jong Seong

Shareholders

HD HYUNDAI Co., Ltd. (35.0%)
National Pension Service of Korea (5.7%)
KCC Corp. (3.9%)
BAMCO, Inc. (2.1%)
The Vanguard Group, Inc. (1.6%)
BlackRock Fund Advisors (1.2%)
Norges Bank Investment Management (0.9%)
Asan Foundation (0.9%)
Korea Shipbuilding & Offshore Engineering Co., Ltd. ESOA (0.8%)
Hyundai Motor Co., Ltd. (0.7%)

Contact Details

Website:http://www.ksoe.co.kr
Address: 477, Bundangsuseo-ro, Bundang-gu, Seongnam-si, 13353, South Korea
Phone: +82.2.1811.9114

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Competitors

Samsung Heavy Industries Co., Ltd
Wartsila Oyj Abp
China CSSC Holdings Limited Class A
Daewoo Shipbuilding & Marine Engineering Co., Ltd
Yangzijiang Shipbuilding (Holdings) Ltd.
Hyundai Mipo Dockyard Co., Ltd
TRATON SE
STX Engine Co., Ltd.
STX Heavy Industries Co., Ltd.
Firstec Co., Ltd
Daesung Industrial Co., Ltd
SK Discovery Co. Ltd.
SK Gas Co., Ltd.

Last Updated on 26 May, 2023