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Producer Manufacturing

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

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 2021 KRWUSD
Revenue15,509.54B13,543.56M
Gross Profit-536,643.81M-468.61M
Operating income-1,380.22B-1,205.27M
Income before tax-1,620.89B-1,415.42M
Net income-929,318.92M-811.51M
EBITDA-981,496.77M-857.08M
Diluted EPS-13,141.75-11.47
Dividends Per Share00
Total Assets27,293.09B22,959.49M
Total liabilities14,879.33B12,516.79M
Total equity9,856.55B8,291.53M
Operating cash flow735,475.49M642.24M
Currency in KRWCurrency in USD

Historical Data

 Dec 2017Dec 2018Dec 2019Dec 2020Dec 2021
Revenue 15,468.83B 13,119.89B 15,428.90B 15,021.53B 15,509.54B
Gross Profit 999,239.51M 321,376.72M 1,200.56B 824,326.10M -536,643.81M
Operating income -1,458.37M -531,672.01M 536,430.61M 191,442.13M -1,380.22B
Income before tax -26,905.46M -854,036.98M 71,066.05M -574,157.85M -1,620.89B
Net income -193,108.80M -677,539.78M 154,377.78M -833,786.98M -929,318.92M
EBITDA 442,998.63M -136,698.01M 939,622.61M 600,605.13M -981,496.77M
Diluted EPS -1,902.99 -8,061.42 2,183.10 -11,790.86 -13,141.75
Dividends Per Share 0 0 0 0 0
Total Assets 30,408.84B 24,729.89B 25,055.37B 25,244.19B 27,293.09B
Total liabilities 18,465.39B 12,047.52B 12,129.05B 12,822.96B 14,879.33B
Total equity 10,692.85B 11,453.63B 11,566.90B 10,906.29B 9,856.55B
Operating cash flow 1,611.69B -777,611.37M -1,317.58B -54,212.45M 735,475.49M
 Dec 2017Dec 2018Dec 2019Dec 2020Dec 2021
Revenue 13,683.05M 11,921.55M 13,230.24M 12,731.32M 13,543.56M
Gross Profit 883.88M 292.02M 1,029.47M 698.64M -468.61M
Operating income -1.29M -483.11M 459.98M 162.25M -1,205.27M
Income before tax -23.79M -776.03M 60.93M -486.62M -1,415.42M
Net income -170.81M -615.65M 132.37M -706.66M -811.51M
EBITDA 391.85M -124.21M 805.72M 509.03M -857.08M
Diluted EPS -1.68 -7.32 1.87 -9.99 -11.47
Dividends Per Share 0 0 0 0 0
Total Assets 28,404.88M 22,163.37M 21,665.76M 23,238.69M 22,959.49M
Total liabilities 17,248.51M 10,797.20M 10,488.18M 11,804.25M 12,516.79M
Total equity 9,988.18M 10,264.95M 10,002.07M 10,039.85M 8,291.53M
Operating cash flow 1,425.63M -706.58M -1,129.82M -45.94M 642.24M

Valuation Measures

Dec 2021
PER--
ROA-3.53%
ROE-8.95%
Operating margin-8.89%
Profit margin-5.99%

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. (2.7%)
  • The Vanguard Group, Inc. (1.5%)
  • BlackRock Fund Advisors (1.1%)
  • Asan Foundation (0.9%)
  • Norges Bank Investment Management (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: 14/F, Hyundai Building, 75 Yulgok-ro, Seoul, 03058, South Korea
  • Phone: +82.2.1811.9114

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Competitors

  • Samsung Heavy Industries Co., Ltd
  • Wartsila Oyj Abp
  • China Shipbuilding Industry Company Limited Class A
  • China CSSC Holdings Limited Class A
  • Daewoo Shipbuilding & Marine Engineering Co., Ltd
  • Hyundai Mipo Dockyard Co., Ltd
  • TRATON SE
  • STX Engine Co., Ltd.
  • STX Heavy Industries Co., Ltd.
  • Hyunjin Materials Co., Ltd
  • Firstec Co., Ltd
  • Daesung Industrial Co., Ltd
  • SK Discovery Co. Ltd.
  • SK Gas Co., Ltd.
  • Sumitomo Chemical Co., Ltd.
Last Updated on 10 Aug, 2022

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