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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 2019 KRWUSD
Revenue15,428.90B13,230.24M
Gross Profit1,200.56B1,029.47M
Operating income536,430.61M459.98M
Income before tax71,066.05M60.93M
Net income154,377.78M132.37M
EBITDA939,622.61M805.72M
Diluted EPS2,183.101.87
Dividends Per Share00
Total Assets25,055.37B21,665.76M
Total liabilities12,129.05B10,488.18M
Total equity11,566.90B10,002.07M
Operating cash flow-1,317.58B-1,129.82M
Currency in KRWCurrency in USD

Historical Data

 Dec 2015Dec 2016Dec 2017Dec 2018Dec 2019
Revenue 46,231.71B 22,300.43B 15,468.83B 13,119.89B 15,428.90B
Gross Profit 1,455.73B 1,932.18B 999,239.51M 321,376.72M 1,200.56B
Operating income -1,548.57B 391,985.68M -1,458.37M -531,672.01M 536,430.61M
Income before tax -1,841.41B 96,027.01M -26,905.46M -854,036.98M 71,066.05M
Net income -1,370.20B -42,967.51M -193,108.80M -677,539.78M 154,377.78M
EBITDA -480,336.18M 847,265.68M 442,998.63M -136,698.01M 939,622.61M
Diluted EPS -31,129.77 11,209.73 -1,902.99 -8,061.42 2,183.10
Dividends Per Share 0 0 0 0 0
Total Assets 49,732.83B 49,249.17B 30,408.84B 24,729.89B 25,055.37B
Total liabilities 34,662.46B 31,788.01B 18,465.39B 12,047.52B 12,129.05B
Total equity 13,307.53B 15,507.86B 10,692.85B 11,453.63B 11,566.90B
Operating cash flow -680,519.06M 2,055.03B 1,611.69B -777,611.37M -1,317.58B
 Dec 2015Dec 2016Dec 2017Dec 2018Dec 2019
Revenue 40,847.82M 19,221.37M 13,683.05M 11,921.55M 13,230.24M
Gross Profit 1,286.20M 1,665.40M 883.88M 292.02M 1,029.47M
Operating income -1,368.23M 337.86M -1.29M -483.11M 459.98M
Income before tax -1,626.97M 82.76M -23.79M -776.03M 60.93M
Net income -1,210.63M -37.03M -170.81M -615.65M 132.37M
EBITDA -424.39M 730.28M 391.85M -124.21M 805.72M
Diluted EPS -27.50 9.66 -1.68 -7.32 1.87
Dividends Per Share 0 0 0 0 0
Total Assets 42,414.25M 40,775.93M 28,404.88M 22,163.37M 21,665.76M
Total liabilities 29,561.60M 26,318.93M 17,248.51M 10,797.20M 10,488.18M
Total equity 11,349.22M 12,839.76M 9,988.18M 10,264.95M 10,002.07M
Operating cash flow -601.26M 1,771.29M 1,425.63M -706.58M -1,129.82M

Valuation Measures

Dec 2019
PER57.94
ROA0.62%
ROE1.34%
Operating margin3.47%
Profit margin1.00%

Key executives

  • Co-Chief Executive Officer & Director: Oh-Gap Kwon
  • Co-Chief Executive Officer & Director: Sam-Hyeon Gah
  • Chief Financial Officer & Director: Young-Chul Cho
  • Head-Compliance Support: Tae-Jung Kim
  • Vice President & Head-Compliance Management: Sea-Heon Oh

Shareholders

  • Hyundai Heavy Industries Holdings Co., Ltd. (30.9%)
  • National Pension Service of Korea (10.0%)
  • KCC Corp. (6.6%)
  • Asan Foundation (2.3%)
  • Hyundai Motor Co., Ltd. (2.3%)
  • Hyundai Heavy Industries Co., Ltd. ESOA (2.2%)
  • The Vanguard Group, Inc. (1.7%)
  • BlackRock Fund Advisors (1.1%)
  • Norges Bank Investment Management (0.9%)
  • BAMCO, Inc. (0.9%)

Contact Details

  • Website:http://hhi.co.kr
  • Address: 14/F, Hyundai Building, 75 Yulgok-ro, Seoul, 03058, South Korea
  • Phone: +82.2.1811.9114

Related Companies

  • Hyundai Heavy Industries Co., Ltd.
  • Hyundai Energy Solutions Co., Ltd.
  • Hyundai Global Service Co. Ltd.
  • Hyundai Heavy Industries Co. Ltd. /3 Subs/
  • Hyundai Electrosystems LLC
  • Hyundai Commercial Center Kazakhstan LLC
  • Hyundai Financial Leasing Co., Ltd.
  • Songjae Industries Co., Ltd.
  • Taebaek Wind Power Co., Ltd.
  • Changzhou Hyundai Hydraulic Machinery Co. Ltd.
  • Hyundai (Shandong) Heavy Industries Machinery Co. Ltd.
  • Hyundai (Jiangsu) Construction Machinery Co. Ltd.
  • Hyundai Oil Singapore Pte Ltd.
  • PT Hyundai Machinery Indonesia
  • Hyundai Energy & Resources Co., Ltd.
  • Yantai Hyundai Heavy Industries Co. Ltd.
  • Hyundai Construction Equipment Maroc SARL
  • Hyundai Construction Equipment Australia Pty Ltd.
  • Hyundai Construction Equipment Service Co. Ltd.
  • 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
  • Volvo AB Class B
  • Caterpillar Inc.
  • Komatsu Ltd.
  • Alfa Laval AB
  • LG Electronics Inc.
  • S-Energy Co., Ltd.
  • SHINSUNG E&G Co.LTD.
  • HANWHA SOLUTIONS CORPORATION
  • PG&E Corporation
  • TRATON SE
  • Doosan Corporation
  • STX Engine Co., Ltd.
  • HSD Engine Co., Ltd
  • STX Heavy Industries Co., Ltd.
  • Canadian Solar Inc.
  • TechnipFMC Plc
  • Daewoo Shipbuilding & Marine Engineering Co., Ltd
  • Daesung Industrial Co., Ltd
  • BHI Co., Ltd.
  • Hyundai Mipo Dockyard Co., Ltd
  • SunPower Corporation
  • Hyunjin Materials Co., Ltd
  • Firstec Co., Ltd
  • E1 Corporation
  • Hankuk Carbon Co., Ltd
  • SK Discovery Co. Ltd.
  • SK Gas Co., Ltd.
  • SK Innovation Co., Ltd
Last Updated on 28 Sep, 2020

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