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Producer Manufacturing

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 KRWUSD
Revenue13,119.89B11,921.55M
Gross Profit321,376.72M292.02M
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 Share00
Total Assets24,729.89B22,163.37M
Total liabilities12,047.52B10,797.20M
Total equity11,453.63B10,264.95M
Operating cash flow-777,611.37M-706.58M
Currency in KRWCurrency in USD

Historical Data

 Dec 2014Dec 2015Dec 2016Dec 2017Dec 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 2014Dec 2015Dec 2016Dec 2017Dec 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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  • Changzhou Hyundai Hydraulic Machinery Co. Ltd.
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  • Hyundai Oil Singapore Pte Ltd.
  • PT Hyundai Machinery Indonesia
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  • Yantai Hyundai Heavy Industries Co. Ltd.
  • Hyundai Construction Equipment Maroc SARL
  • Hyundai Construction Equipment Australia Pty Ltd.
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  • Hyundai Heavy Industries Co., Ltd. ESOA
  • Wartsila Hyundai Engine Co. Ltd.
  • Hyundai Construction Equipment Europe BV
  • Hyundai Engineer Construction Co. Ltd.
  • Hyundai Fiber Co., Ltd.
  • Hyundai Hellas P&R Davari SA
  • Hyundai Construction Equipment Americas, Inc.
  • Khorol Zerno LLC
  • Hyundai Petrochemicals Co., Ltd.
  • Ideal Electronic Co.
  • Hyundai M Partners Co., Ltd.

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

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