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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 2020 KRWUSD
Revenue15,021.53B12,731.32M
Gross Profit824,326.10M698.64M
Operating income191,442.13M162.25M
Income before tax-574,157.85M-486.62M
Net income-833,786.98M-706.66M
EBITDA600,605.13M509.03M
Diluted EPS-11,790.86-9.99
Dividends Per Share00
Total Assets25,244.19B23,238.69M
Total liabilities12,822.96B11,804.25M
Total equity10,906.29B10,039.85M
Operating cash flow-54,212.45M-45.94M
Currency in KRWCurrency in USD

Historical Data

 Dec 2016Dec 2017Dec 2018Dec 2019Dec 2020
Revenue 22,300.43B 15,468.83B 13,119.89B 15,428.90B 15,021.53B
Gross Profit 1,932.18B 999,239.51M 321,376.72M 1,200.56B 824,326.10M
Operating income 391,985.68M -1,458.37M -531,672.01M 536,430.61M 191,442.13M
Income before tax 96,027.01M -26,905.46M -854,036.98M 71,066.05M -574,157.85M
Net income -42,967.51M -193,108.80M -677,539.78M 154,377.78M -833,786.98M
EBITDA 847,265.68M 442,998.63M -136,698.01M 939,622.61M 600,605.13M
Diluted EPS 11,209.73 -1,902.99 -8,061.42 2,183.10 -11,790.86
Dividends Per Share 0 0 0 0 0
Total Assets 49,249.17B 30,408.84B 24,729.89B 25,055.37B 25,244.19B
Total liabilities 31,788.01B 18,465.39B 12,047.52B 12,129.05B 12,822.96B
Total equity 15,507.86B 10,692.85B 11,453.63B 11,566.90B 10,906.29B
Operating cash flow 2,055.03B 1,611.69B -777,611.37M -1,317.58B -54,212.45M
 Dec 2016Dec 2017Dec 2018Dec 2019Dec 2020
Revenue 19,221.37M 13,683.05M 11,921.55M 13,230.24M 12,731.32M
Gross Profit 1,665.40M 883.88M 292.02M 1,029.47M 698.64M
Operating income 337.86M -1.29M -483.11M 459.98M 162.25M
Income before tax 82.76M -23.79M -776.03M 60.93M -486.62M
Net income -37.03M -170.81M -615.65M 132.37M -706.66M
EBITDA 730.28M 391.85M -124.21M 805.72M 509.03M
Diluted EPS 9.66 -1.68 -7.32 1.87 -9.99
Dividends Per Share 0 0 0 0 0
Total Assets 40,775.93M 28,404.88M 22,163.37M 21,665.76M 23,238.69M
Total liabilities 26,318.93M 17,248.51M 10,797.20M 10,488.18M 11,804.25M
Total equity 12,839.76M 9,988.18M 10,264.95M 10,002.07M 10,039.85M
Operating cash flow 1,771.29M 1,425.63M -706.58M -1,129.82M -45.94M

Valuation Measures

Dec 2020
PER--
ROA-3.31%
ROE-7.42%
Operating margin1.27%
Profit margin-5.55%

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 (9.9%)
  • KCC Corp. (6.6%)
  • Asan Foundation (2.3%)
  • Hyundai Motor Co., Ltd. (2.3%)
  • BAMCO, Inc. (1.9%)
  • Hyundai Heavy Industries Co., Ltd. ESOA (1.7%)
  • The Vanguard Group, Inc. (1.4%)
  • BlackRock Fund Advisors (1.2%)
  • Norges Bank Investment Management (0.9%)

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

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
  • Daewoo Shipbuilding & Marine Engineering Co., Ltd
  • Hyundai Mipo Dockyard Co., Ltd
  • Volvo AB Class B
  • Komatsu Ltd.
  • Caterpillar Inc.
  • Alfa Laval AB
  • Pacific Green Technologies Inc.
  • TRATON SE
  • STX Engine Co., Ltd.
  • HSD Engine Co., Ltd
  • STX Heavy Industries Co., Ltd.
  • Canadian Solar Inc.
  • Daesung Industrial Co., Ltd
  • BHI Co., Ltd.
  • SunPower Corporation
  • Hyunjin Materials Co., Ltd
  • Firstec Co., Ltd
  • SK Discovery Co. Ltd.
  • SK Gas Co., Ltd.
  • Sumitomo Chemical Co., Ltd.
Last Updated on 11 May, 2021

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