Hyundai Heavy Industries Co., Ltd.

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See more articles on Hyundai Heavy Industries Co., Ltd.

Company Background

South Korea's Hyundai Heavy Industries is one of the world's largest shipbuilders. It is also involved in oil refining through its subsidiary, Hyundai Oilbank. 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

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 2018	KRW	USD
Revenue	13,119.89B	11,921.55M
Gross Profit	321,376.72M	292.02M
Operating income	-531,672.01M	-483.11M
Income before tax	-854,036.98M	-776.03M
Net income	-677,539.78M	-615.65M
EBITDA	-136,698.01M	-124.21M
Diluted EPS	-8,061.42	-7.32
Dividends Per Share	0	0
Total Assets	24,729.89B	22,163.37M
Total liabilities	12,047.52B	10,797.20M
Total equity	11,453.63B	10,264.95M
Operating cash flow	-777,611.37M	-706.58M
	Currency in KRW	Currency in USD

Historical Data

KRW | USD

	Dec 2014	Dec 2015	Dec 2016	Dec 2017	Dec 2018
Revenue	52,582.40B	46,231.71B	22,300.43B	15,468.83B	13,119.89B
Gross Profit	-810,113.57M	1,455.73B	1,932.18B	999,239.51M	321,376.72M
Operating income	-3,227.74B	-1,548.57B	391,985.68M	-1,458.37M	-531,672.01M
Income before tax	-3,105.04B	-1,841.41B	96,027.01M	-26,905.46M	-854,036.98M
Net income	-1,769.92B	-1,370.20B	-42,967.51M	-193,108.80M	-677,539.78M
EBITDA	-2,209.57B	-480,336.18M	847,265.68M	442,998.63M	-136,698.01M
Diluted EPS	-40,974.09	-31,129.77	11,209.73	-1,902.99	-8,061.42
Dividends Per Share	2,556.96	0	0	0	0
Total Assets	53,384.41B	49,732.83B	49,249.17B	30,408.84B	24,729.89B
Total liabilities	37,174.43B	34,662.46B	31,788.01B	18,465.39B	12,047.52B
Total equity	14,745.19B	13,307.53B	15,507.86B	10,692.85B	11,453.63B
Operating cash flow	1,691.67B	-680,519.06M	2,055.03B	1,611.69B	-777,611.37M

	Dec 2014	Dec 2015	Dec 2016	Dec 2017	Dec 2018
Revenue	49,952.01M	40,847.82M	19,221.37M	13,683.05M	11,921.55M
Gross Profit	-769.58M	1,286.20M	1,665.40M	883.88M	292.02M
Operating income	-3,066.28M	-1,368.23M	337.86M	-1.29M	-483.11M
Income before tax	-2,949.71M	-1,626.97M	82.76M	-23.79M	-776.03M
Net income	-1,681.38M	-1,210.63M	-37.03M	-170.81M	-615.65M
EBITDA	-2,099.04M	-424.39M	730.28M	391.85M	-124.21M
Diluted EPS	-38.92	-27.50	9.66	-1.68	-7.32
Dividends Per Share	2.42	0	0	0	0
Total Assets	48,568.81M	42,414.25M	40,775.93M	28,404.88M	22,163.37M
Total liabilities	33,821.07M	29,561.60M	26,318.93M	17,248.51M	10,797.20M
Total equity	13,415.08M	11,349.22M	12,839.76M	9,988.18M	10,264.95M
Operating cash flow	1,607.05M	-601.26M	1,771.29M	1,425.63M	-706.58M

Valuation Measures

Dec 2018
PER	--
ROA	-2.45%
ROE	-6.11%
Operating margin	-4.05%
Profit margin	-5.16%

Key executives

Chief Executive Officer & Director: Oh-Gap Kwon
Chief Financial Officer & Director: Young-Chul Cho
Vice President & Head-Compliance Management: Sea-Heon Oh
Vice President: Ki-Sun Jung
Vice President & Head-Management Support: Jin-Yul No

Shareholders

Hyundai Heavy Industries Holdings Co., Ltd. (30.9%)
National Pension Service of Korea (10.2%)
KCC Corp. (6.6%)
Hyundai Heavy Industries Co., Ltd. ESOA (3.3%)
Asan Foundation (2.3%)
Hyundai Motor Co., Ltd. (2.3%)
The Vanguard Group, Inc. (1.6%)
BlackRock Fund Advisors (1.2%)
Norges Bank Investment Management (0.8%)
Samsung Asset Management Co., Ltd. (0.8%)

Contact Details

Website:http://hhi.co.kr
Address: 14th Floor, Hyundai Building, 75 Yulgok-ro, Seoul, 03058, South Korea
Phone: +82.52.202.2114

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Competitors

Wartsila Oyj Abp
Samsung Heavy Industries Co., Ltd
Daewoo Shipbuilding & Marine Engineering Co., Ltd
IHI Corporation
Hitachi Zosen Corporation
China Shipbuilding Industry Company Limited Class A
China CSSC Holdings Limited Class A
Volkswagen AG Pref
Yangzijiang Shipbuilding (Holdings) Ltd.
JFE Holdings, Inc.
Doosan Corporation
Hyundai Heavy Industries Holdings Co., Ltd.
Caterpillar Inc.
CSBC Corp. Taiwan
HSD Engine Co., Ltd
SPX Corporation
Petrofac Limited
Gaztransport & Technigaz SA
BHI Co., Ltd.
TechnipFMC Plc
McDermott International, Inc.
Hanjin Heavy Industries & Construction Co., Ltd
Daesung Industrial Co., Ltd
Hyundai Mipo Dockyard Co., Ltd
SunPower Corporation
Hyunjin Materials Co., Ltd
Firstec Co., Ltd
Genie Energy Ltd. Class B
Hankuk Carbon Co., Ltd
SK Discovery Co. Ltd.

Last Updated on 13 Dec, 2019