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Hyundai Q1 Net Profit up 21%

Hyundai Heavy Industries, the world's biggest shipbuilder reported a net profit of KRW 903 Billion, an increase of 21% from last year.

Sales rose to 16.92% KRW 6.3 Trillion won with operating profit up 10.99 % to 991.8 Billion. Hyundai Heavy's annual sales target for this year is KRW 26.9 trillion and new orders of USD 26.6 Billion

The company's operating profits were buoyed by increased sales in the shipbuilding and engine & machinery business, rebounding and construction equipment sales in the Chinese market.

The first quarter performance results were the first under which the company applied a new International Financial Reporting Standard

Hyundai Heavy Industries Co Ltd is expected to enjoy strong orders momentum, analysts said, after the company posted a forecast-beating quarterly operating profit on lucrative ship and offshore plant orders.

Hyundai was likely to benefit from growing demand for high-value products such as large-size containers, drillships and LNG carriers despite competition from Chinese peers, analysts said.

"A solid cycle for the offshore sector is coming, which should strengthen fresh order flows," said HI Investment & Securities analyst Hur Sung-duck.

The world's largest shipbuilder logged a 992 billion won ($924.2 million) operating profit for the January-March quarter, up 11 percent from 894 billion won last year.

Analysts forecast an average operating profit of 942 billion won operating profit, according to a survey by Thomson Reuters I/B/E/S.

Total revenue rose 17 percent to 6.3 trillion won.

A recent increase in the cost of steel plates is expected to crimp shipbuilder operating margins ahead. [ID: nL3E7FJ05O]

However, backed by a strong outlook for other businesses, analysts said Hyundai Heavy would be able to minimise the cost burden through its diversified portfolio, which ranges from offshore facilities to electrical equipment.

"The company's operating profit was buoyed by increased sales in its shipbuilding and engine & machinery operations, and rebounding construction equipment sales in the Chinese market," Hyundai said in a statement.

Shares in Hyundai have risen 7.8 percent over the past three months, outperforming the overall market's 4.8 percent gain. ($1 = 1073.400 Korean Won) (Reporting by Ju-min Park; Editing by Chris Lewis)

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Hyundai Engineering' s New "A+" Credit Rating

Hyundai Engineering new  “A+” Credit Rating

Korea Investors Service recently upgraded the Hyundai Engineering Co Ltd’s credit rating from “A” to “A+” within 6 month period. The new levelled up rating of Hyundai Engineering outlook as “Stable” is also an effect of the merger between the Hyundai Motors and Hyundai Engineering along with its continuing growth and expansion in the overseas projects.

Hyundai Engineering is founded in 1974 as Hyundai Technology Development Co., Ltd which merged with Halla Engineering Co., Ltd in 1980 and changed its name as Hyundai Engineering Co. Ltd in March 1982. The continues emerging of Hyundai Engineering Co., Ltd in the Design, Construction and Engineering in the overseas market strengthens is capability and popularity to compete globally after the ENR ranked them at top Design firm in the world.

Hyundai Engineering Co., Ltd (HEC) merged with Hyundai Engineering & Construction Co., Ltd (HDEC) in 1999 but separated as an independent entity in 2001.

Started in 2005, based on actual balance of 200 billion won of Hyundai Engineering, it dramatically increased to 4.1888 trillion won last year.

The merger of Hyundai Motor Group and Hyundai Engineering give a better impact of the company as expected to have stable governance, good financial stability and due to strong overseas order for Oil drilling, power plant and infrastructure projects, credit rating agency are convinced that it’s time to level up its credit rating. 


Hyundai Motor Group Completes Acquisition of Hyundai E&C Group

- Hyundai Motor Group acquires stake in Hyundai E&C for 4.96 trillion won

- The Group will support Hyundai E&C to become a world-best company

- Synergies among businesses will strengthen the Group’s competitiveness

Hyundai Motor Group officially completed a deal to acquire a controlling stake in Hyundai Engineering & Construction Group (Hyundai E&C group) on April 1, diversifying the Group’s business portfolio and demonstrating its confidence to make Hyundai E&C a world-best construction company.

“Hyundai Motor Group deeply welcomes Hyundai E&C as a family member,” said Mong Koo Chung, Hyundai Motor Group’s Chairman in his first address to Hyundai E&C employees on April 1. “Hyundai Motor Group will focus on nurturing the construction sector as one of the Group’s three core driving forces in the future, along with the automotive and steel sectors. Hyundai Motor Group will make Hyundai E&C a high-value engineering company with enforced engineering, operation and planning capabilities.”

Since chosen as the preferred bidder on Jan. 7, Hyundai Motor Group’s acquisition process has been proceeding smoothly, signing the MOU (Memorandum of Understanding) on Jan. 14 and an SPA (Share Purchase Agreement) March 8. Hyundai Motor Group submitted the final balance of 4.4641 trillion won (Total amount: 4.9601 trillion won*) on April 1, successfully completing its acquisition of a 34.9 percent controlling stake in Hyundai E&C.

* Approximately US$4.6 billion according to currency exchange rates as of April 4 in Seoul.

Hyundai Motor Group announced last October that it would invest 10 trillion won in Hyundai E&C to make it the world-best construction company with orders of 120 trillion won and sales of 55 trillion won by 2020.

Hyundai E&C will be able to take advantage of Hyundai Motor Group’s global competitiveness and its high credibility in overseas markets. Together with Hyundai Rotem, Hyundai E&C will also be able to tap high demand in overseas high-speed rail projects. Through Hyundai E&C, the Group will be able to strengthen its presence in so-called “green growth” areas by efficiently building infrastructure for electric vehicles.

“Hyundai Motor Group’s broad global network spanning across some 190 countries, as well as its global competitiveness in diverse business fields such as steel, rail and finance, will be a great asset to Hyundai E&C. Hyundai Motor Group companies will actively support Hyundai E&C to help it realize its full capabilities,” added Chairman Chung.



The Successor of the late Chung's Hyundai Engineering take his seat

Rebuilding The Broken Pieces of Hyundai

Hyundai Motor Group has set up a new office for Chairman Mong Koo Chung at Hyundai Engineering and Construction, in an apparent move to emphasize its control over the builder, a business founded by his father the late Ju Yung Chung.

“The chairman will be using the old office used by his father, the late chairman (Ju Yung Chung), and it represents his resolve and the importance of Hyundai E&C as a member of the group, “while the chairman’s office at the Motor Group in southern Seoul will be continuously maintained.

Hyundai Motor Group, which is now promoting the construction business as one of its top three growth-engines, also unveiled a new corporate logo on Thursday.

However, industry watchers say that the move is related to the symbolic meaning Hyundai E&C holds for Hyundai conglomerates.

Chairman’s Chung’s taking of his father’s office is clearly dishevelled feathers at Hyun Jeong-eun’s phony CEO of Hyundai Group, which unsuccessfully competed for Hyundai E&C with Hyundai Motor Group. This move is the most positive way of succession of the throne in the Hyundai Conglomerate’s founded Hyundai business. Chairman’s Chung rights over succession is the most proper way since the Hyundai is founded by his father and not by the Hyun clan who want to take a full control of what the late Chung’s founded business wherein she is not part of the family.

During the process, the two conglomerates had resorted to legal action against each other on a number of charges including defamation in what many called yet another family feud as the group chairwoman is the widow of Chung Mong-hun, brother of Hyundai Motor Group chairman.

While Hyundai Group’s public relations officials declined to comment, sources inside the conglomerate said that the group was “not happy” about the developments regarding the new office.

The opening of a new office for the chairman, who went to work at Hyundai E&C building for the first time in 11 years on Friday, is not the only move that could be interpreted as Hyundai Motor Group’s tightening of its grip on the builder.

On Thursday, Hyundai Amco vice chairman Kim Chang-hee was appointed as Hyundai E&C’s CEO to serve with Kim Joong-kyum who will continue to hold the CEO’s post.

Having worked for Hyundai Motor Co. for nearly 30 years, Kim is said to be a “Hyundai Man” through and through, and he also headed the auto group’s team for Hyundai E&C acquisition.

Further clinching his grasp over the construction company, Chung on Friday vowed Friday to make an all-out effort to help develop Hyundai E&C into a leading global company.

The pledge came after the group completed its acquisition of Hyundai Engineering & Construction Co. on the same day by paying the remaining 4.46 trillion won ($4.06 billion) out of the 4.96 trillion won deal.

“Everyone at Hyundai Motor Group will give their full support to help you realize all your abilities and potential,” Chairman Chung said in a meeting with Hyundai E&C officials.

Hyundai E&C, the country’s largest builder, is considered to have formed the basis on which late Chung Ju-yung built his business empire, which gave rise to a number of smaller conglomerates including Hyundai Motor Group and Hyundai Group.

The construction firm fell under the joint management of its creditors following a debt for equity swap in 2001. Hyundai Motor Group was selected a preferred bidder in January and signed the deal for the takeover in early March.

With its acquisition of the country’s largest builder, Hyundai Motor Group, also the parent of South Korea’s top two automakers, Hyundai Motor Co. and Kia Motors Corp., now has 50 affiliates with combined assets of 126 trillion won and 184,000 employees, the group said.

“Hyundai Motor Group’s massive global network spanning nearly 190 countries throughout the world, along with the global competitiveness of our group’s other units, will all serve to reinforce Hyundai Construction,” Chung said.


HEC 480 Million USD Musandam Gas Plant


Oman Oil Company Exploration and Production (OOCEP), the upstream subsidiary of the government owned energy investment firm Oman Oil Company, has awarded a contract valued at $480 million to Hyundai Engineering Co Ltd (HEC) for the implementation of a gas processing plant in Musandam Governorate.

As part of the Engineering, Procurement and Construction (EPC) contract, HEC will build a gas separation and oil treatment plant that will process hydrocarbons from the Oman’s West Bukha field offshore Musandam peninsula. A 36 month timeframe has been specified for the completion of the project.

Salim al Sibani, CEO of OOCEP noted: “This is a very significant project for Oman and the Musandam Governorate. The Musandam Gas Plant is part of a major integrated development comprising West Bukha field development; interlink offshore pipelines crude storage, export facilities and gas fired power plant.

“The project will act as the foundation for additional oil and gas developments. We look forward to a collaborative effort with Hyundai Engineering to compete the project safely and successfully”.

 Welcoming the contract Dong Wook Kim, Chief Executive Officer on Hyundai Engineering Co ltd, commented: “This is an important deal for Hyundai Engineering Co., Ltd, as it returns to Musandam with supporting services and builds on the reputation of Hyundai Engineering’s oil and gas services expertise in Oman.

Set up as a legal entity in 2009, OOCEP has numerous assets and diversified interests in oil and gas exploration and production both within and outside Oman.


Hyundai Motor Group - Hyundai Engineering: 1 Family Ceremony

Hyundai Motor Group -& Hyundai Engineering & Construction (Take-over) Ceremony

April 1, 2011 8:00 AM

Hyundai Motor Group Chairman Mong-koo Chung and Hyundai Engineering and Construction as a family again for organizing employees' views, and vowed a spirited leap.

A short ceremony held today in Grand Ballroom Hyatt Hotel Seoul which highlighted the Korean National Flag and Hyundai Logo fly together for the better future of the reunited group of companies in leaping together for a new future celebrated in Hyundai Motor Group Building Auditorium with Chairman Mong-koo Chung and Hyundai Engineering and Construction employees with around 1,000  people attended. Hyundai Chairman Mong-koo Chung in this position to build a leading company INVINCIBLE praised the efforts of employees toward the future with a new challenge.

“Today, Hyundai Motor Group is part of the preliminary steps with a very meaningful and historic day," Chairman Mong-koo Chung, said, "Hyundai Motor Group welcomes the Hyundai Engineering & Construction Group to become one big family," and pledge to build together and grow together especially to foster the national the Korea’s Largest Hyundai E & C group’s modern construction engineering, operations, planning, engineering-oriented value-added capabilities enhanced by global companies.

"In modern construction, domestic construction industry's first sold 10 trillion to break through the performance was recorded," Mong-koo Chung said. “We will tackle, Hyundai Engineering and Construction employees and Republic of Korea leading the construction of a levy that self-esteem and South Korea build the future of responsible mission to have a new modern building together toward the future.

Hyundai Motor Group last year expressed interest in acquisition and future construction of the modern order of 10 trillion invested in 120 trillion won by 2020, sales of 55 trillion won would create a global top-notch construction company. For this purpose, to maximize synergies within the group Hyundai Motor Group's global brand power and complementary, to develop and diversify the group's business portfolio and ability of the group was willing to mobilize. In addition, employment of modern construction is planning to embark actively in the development of human resources, suppliers and subcontractors with the quality and skills development, such as an overseas expansion of mutual cooperation and mutual growth through a last will.

Hyundai Motor Group, on January 7, 2011 last selected as the preferred bidder since the January 14 memorandum of understanding (MOU) signed, and on March 8th Stock Trading bongyeyak (SPA) entered into a seamless argument, such as working the past few months has proceeded. The final day, the balance (4.4641 trillion won) by paying a total of 4.9601 trillion won in payment procedures, Hyundai Engineering & Construction was finished argument.

On the other hand, Chairman Mong-koo Chung  together with the Hyundai Construction and Hyundai Motor Group executive VP's  will gather together in Hyatt Hotel  family around 6:00 PM with more than 540 family members have to know each other.


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