Hyundai Heavy Industries Co., Ltd. May 2003

Transcription

1 Hyundai Heavy Industries Co., Ltd. May

2 Table of Contents 1. Overview 2. Financial Results and Analysis 3. Business 4. Current Issues 2

3 1. Overview 3

4 Overview of the Company Establishment : Dec. 28, 1973 Listing Date : Aug. 24, 1999 Shareholders Structure (As of March of 2003) Total Stocks Issued : 76 mil. shares Paid-in Capital : 380 bln % Total No. of Employees : 26,090 Total Square Measure : 55.77% 30.35% 9.9 mil. sq. yds. Total Gross Area of Buildings : 2 mil. sq. yds. Total No. of Dry Docks : 9 M.J.Chung Hyundai Motors Co. 2.88% Treasury Fund Others 4

5 Business Structure (Unit : billion won) Division Shipbuilding Profile World s largest shipbuilder Main products Tanker B/c. PC Containership LNG/ LPG FPSO/ Offshore Drilling Rig Capacity 3.6mil GT (60vessels) Sales (FY2002) 3,708 % 45.6% Offshore & Engineering One of a few specialized offshore contractors in the world Floating units: FPSO,TLP Platforms: Jacket/ Pile,Deck Offshore Installation Fixed platform : 30,000 Ton FSO/ FPSO : 38,000 Ton 1, % Industrial Plant & Engineering Provider of a broad range of products and services as an EPC contractor Oil & Gas production Desalination plant Power plant : 500MW % Engine & Machinery World s # 1 marine diesel engine producer Diesel Engines Propeller Marine & Industrial Turbines Automation & Robotics systems Industrial & Marine pumps Diesel Engines : 6.2mil bhp % Electro Electric Systems Supplier of high tech power systems Transformers Circuit Breakers Switchgears % Construction Equipment Supplier of various types of construction equipment Excavators Wheel Loaders Forklifts 10,800 units (Excavators : 5,000 units) % 5

6 Main Performance in 2002 Built 1,058 vessels as of the end of 2002 Entered Membrane -Type LNG Market (Order from GOLAR LNG of Norway) Received an Order for $740mil worth offshore facility from Exxon- Mobil Co., USA - Kizomba B FPSO Project (Dec. 2002) Diesel Engine & LNG vessels selected as 2002 World Best Products RO-PAX Stena Britannica selected as vessel of 2002 (by Maritime Reporter, Marine Log, US and Naval Architech, UK ) HiMSEN Engine Selected as one of Korea s 10 Best New Technologies Top Market Share of Excavators in Construction Equipment Market in China (23% as of the end of 2002) 6

7 Shipbuilding Delivered a total of 1000 ships to 190 ship owners in 42 countries within 30years since its foundation Taking 15% of global market share, ranked No.1 shipbuilder in the world Actively participate in the high value-added vessel market such as CNG vessel, passenger ship and submarine Annual shipbuilding performance (Unit : Vessel) Tanker successfully delivered to OSG, representing the 1000 th vessel

8 Offshore & Engineering Winning the KIZOMBA B project following KIZOMBA A on a turnkey basis 2002 Performance Realized 1 trillion in sales revenue Enhanced large scale construction capability KIZOMBA A FPSO AMENAM FPO A.P MOLLER JACK-UP #1 LANTAY MOD BAYU-UNDAN

9 Engine & Machinery HIMSEN engine acquired the Register of Shipping certificates from 8 countries and proved its power capacity and quality (Oct., 2002) Dominant market leader in the world mid-size engine market Enhanced export in marine diesel engines and diesel power plants Reduced technical annual cost by 7 billion, enhanced profitability

10 Affiliates (Unit : billion won) Company Sales (FY2002) Total assets (FY2002) Business Line Major Shareholders (As of the end of 2002) remarks Hyundai Samho Heavy Industries 1,134 1,408 Shipbuilding HHI (94.9%) Hyundai Mipo Dockyard 985 1,041 Shipbuilding Conversion Repairing HHI (27.7%) Hyundai Finance Corp. 24 (FY2001) 239 (FY2001) Corporate Finance & Investment HHI (67.5 %) Hyundai Venture Investment 12 (FY2001) 86 (FY2001) Investment in Venture Firms Hyundai Finance Corp. (83.3 %) Hyundai Futures Corp. 15 (FY2001) 51 (FY2001) Financial Services Hyundai Finance Corp. (60.0%) 10

11 2. Financial Results and Analysis 11

12 FY2002 Profits & Losses Analysis Classification Sales Amount 8,134 Remarks (Unit : Bln. Of KRW) Overseas Domestic Operating Profit Loss on reduction of Investments Loss on disposal of Investments Recurring Profit Net Income 6,625 1, Details 1. Loss on reduction of Investments Hynix Semiconductor : 408 Hynix Semiconductor America : 18 Alcan Taihan Aluminum : 11 Hyundai Asan : 5 2. Loss on disposal of Investments Hynix Semiconductor :

13 Sales &Operating Profits by Divisions (Unit : Bln. Of KRW) Sales Operating Profit Profit Margin Sales Operating Profit Profit Margin Shipbuilding 3, % 3, % Offshore & Engineering 1, % 1, % Engines & Machinery % % Electro Electric Systems % % Industrial Plant % % Construction Equipment % % Others % % Total 8, % 7, % 13

14 Balance Sheet (Unit : Bln. Of KRW) % of Change Assets 9, , , % (Current asset) (3,554.0) (3,400.6) (3,837.9) (12.9%) (Investment assets) (1,766.2) (1,187.1) (1,393.8) (17.4%) Liabilities 6, , , % (Total Debt) (3,787.4) (3,753.7) (3,470.2) (-7.6%) Shareholder s Equity 3, , , % (Capital Adjustments) ( ) (- 1,153.6) (-728.6) (-36.8%) Liability to Equity Ratio 204.1% 219.8% 223.8% 4.0% Debt to Equity Ratio 118.6% 132.5% 115.3% -17.2% 14

15 Debt Profile (Unit : Trln. Of KRW) Key Reasons for Increase in Debt since 2000 Operation of Treasury Fund : 705 bil.won Payment on behalf of Hynix Semiconductor to CIBC : bil. Won Major Debt Details in 2002 Domestic Corporate Bond : 1,975bil.Won Bank Term Loan : 1,087 bil.won Foreign Currency Debt : 433 bil. Won (USD 361 mil.) 15

16 Investment Securities in March., 2003 (Estimated) Total Hyundai Asan Total Partnership Investment Overseas Subsidiaries Total Corporation Listed Companies Hynix Semiconductor Hyundai Corporation Hyundai Motors Hyundai Mipo Dockyard Non- Listed Companies Hyundai Oilbank Hyundai Samho Heavy Industries Ownership (%) Shares ( 1,000 of Shares) 24,065 2,142 3,735 81,167 8,949 Market Value/ Book Value (Bil. Of KRW) , , , * Reduction : - KID (0.8) - Hyundai Asan (28.0) - Hynix Semiconductor (76.5) - Alcan Taihan (11.0) * Acquisition : - Hyundai Samho Heavy Industries (204.2) - Hyundai Oilbank (10.7) - Beijing Hyundai (7.9) 2,924 1,814 1,027 (Unit : Bln. Of KRW) 1,003 1,040 Overseas Subsidiaries Partnership Non-Listed Listed 16

17 Payment Guarantees to Other Companies (Unit : Bln. Of KRW) Corporation Total 1,521 1, ,521 1,650 Hyundai Samho heavy Industries Hyundai Engineering & Construction Hynix Semiconductor Hyundai Merchant Marine HHI s Overseas Subsidiaries Affiliate s & Non Affiliate s Overseas Subsidiaries Others All Plants of HSHI have been collateralized by HHI as a security for payment guarantee 17

18 CAPEX and R&D Investment Capital Expenditure (Unit : Bln. Of KRW) R & D Investment 89 (% to sales : 1.2%) 93 (1.1%) (Unit : Bln. Of KRW) 118 (1.4%) Depreciation Expense CAPEX Shipbuilding Engines & Machinery Industrial Plant Offshore & Engineering Construction Equipment Electro Electric Systems Research Centers 18

19 3. Business 19

20 2003 Global Shipbuilding Market Prospects Overall Market Trend Expected Continued Sluggishness in the market for new orders following 2002 (Delay of world economy recovery, large delivery of new vessels, large backlog) Favorable market situation due to the accident M/V prestige off spain and continued rise in freight Limited recovery centering on Tankers, Containers, large-sized Bulk Carriers (double-hull) Prospected increase in demands for LNG with new type of LNG development projects in progress on the mid-term 20

21 2003 Global Offshore Market Prospects Overall Market Trend 1) Platform Expected demand and order Increase of FPSO facilities in West Africa, the U.S. and Brazil Increase demand for gas field development in Sakhalin, Southeast Asia, and China 2) Offshore Installation Expand offshore installation market in India, China, and Southeast Asia Enlarge demand for large-sized undersea pipeline projects in West Africa (2003~2006) 21

22 Global Market Share Trend Market Share by Year World Market Volume(by Construction) (Unit : MIL. GT) 13.4% 15.1% % Others 11.5% 12.2% 9.8% KOREA HHI By Construction Volume (By construction volume) (Source: Lloyd s Register) 22

23 Shipbuilding Price Trends Price Recovery due to increase in market demands since 2002 Shipbuilding pries are subject to change by world economy, shipping market and US-Iraq war (Unit : USD Mil.) Q98 1Q99 1Q00 1Q01 1Q Q98 1Q99 1Q00 1Q01 1Q Q98 1Q99 1Q00 1Q01 1Q02 1Q98 1Q99 1Q00 1Q01 1Q02 (source : Clarkson) 23

24 Orders and Backlog Orders Backlog 7.7 Special & Naval Vessels : U$ 1.0bil 6.4 (Unit: Bln. Of USD) (Unit: Bln. Of USD) Shipbuilding Offshore Others Shipbuilding Offshore Others 24

25 Shipbuilding Performance in (E) remarks Orders 56 vessels 3.32 mil. GT 37 vessels 2.61mil. GT Delivery Backlog 61 vessels 114 vessels 4.35 mil. GT 7.90 mil. GT 15 vessels 136 vessels 1.26mil. GT 9.53mil. GT Orders by shiptype (2003.3) Backlog by shiptype ( ) (Unit : # of vessels) 25

26 HHI s Marketing Strategies Maximize synergistic effects and strengthen Business competitiveness via integration of business organization Secure the stable workload Respond positively to market demand by presenting flexible schedule for delivery Improve the profitability with high value added projects Special concern on special vessels such as LNG, CNG, PLNG, RO-PAX expecting continuous demand 26

27 4. Current Issues 27

28 HSMA Performance Guarantee 1. Structure of the Contract Hynix Hynix Purchase Agreement Purchasing Semiconductor Wafer HSMA HSMA Performance guarantee on Purchase Agreement HHI HHI HMM HMM HC HC Borrowing 1.2 bil. USD Chase Chase Bank Bank 2. Details 1) Guarantee Period : May 1997 ~ May ) Upgrading of Eugine plant : July 2001 ~ January Mortgage value-up for the plant with USD 120 mil. Investment - Reduced the burden of performance guarantee 3) Outstanding loan amount (As of Feb., of 2003) : USD 790 mil. 28

29 Treasury Fund 1. The Status of Treasury Fund (Unit: Bln. of KRW) 2000 # of Stocks 17,673,380 Amount ,933, ,456, Total 23,063, Plan Market Value as of April, 2003 : 545 < Purpose > Stabilization of HHI s share price Minimization of losses on disposal Disposal < Monetization > Issuance of EB Disposal to the third parties Disposal in the Market, etc. 29

30 Trade Dispute between Korea and EU 1. Progress of Dispute 1999 : Started making allegation of Korean Government s illegal assistance May, 2001 : Announced the plan for TBR investigation on Korean shipbuilders June, 2001 : Failure of first bilateral negotiation between Korea and EU May, 2002 : The EU TBR Committee s finalization of an additional report on their damages in containers, and PC vessels June, 2002 : EU s suspension of its action to resume payment to it s shipbuilders and EU and to bring the matter to the WTO Sep : Failure of the second bilateral negotiation between Korea and EU Oct : EU brought the matter to the WTO and started to pay the subsidies to European shipbuilders EU s Allegation 1) Korean Government s illegal assistance to the nations s shipbuilders 2) Alleged practice of Dumping leading to the shipbuilding price decrease Korean Shipbuilder s Rebuttal 1) Restruction on a commercial basis by creditors without the government s subsidies 2) Increase in order performance due to Korean shipbuilder s competitiveness improvement through productivity Enhancement 30

31 Hyundai Heavy Industries Co., Ltd. Thank you 31