Aided by the buoyant world shipbuilding market, the Shipbuilding Division won orders for 50 vessels totaling 3.6 million GT worth $2.54 billion. This represents a 203% improvement year-onyear in contract value and 84% of the division¡¯s goal for the whole of 2003, while bringing Shipbuilding¡¯s orderbook to 150 ships with 10 million GT, sufficient to keep the shipyard operating for the next two and a half years.

With companywide sales for January to May rising 1.7% year-on-year to £Ü3.19 trillion, we anticipate no difficulties in achieving our sales target for 2003.

The harsh competitive business climate prevailing at home and abroad demands that we take aggressive steps to reinforce management efficiency and create a new, more dynamic corporate culture.

On June 1st, HHI launched a companywide management reform movement to advance our vision of being a global leader in the heavy industry field, calling for the establishment of new systems and bolstering internal competencies in order to strengthen our international competitiveness.

The three objectives of this management reform are achieving sustained growth, securing a global competitive edge, and enhancing corporate value.

To ensure sustained growth, we will re-establish our business strategies, to secure our competitive edge in the global industry, we will upgrade all business processes, and to enhance our corporate value, we will institute a new corporate culture.

On the financial side, HHI continues to reduce total outstanding debt through the recent retirement of £Ü110 billion worth of treasury bonds and other measures. As a result, our total outstanding debt as of the end of May stood at £Ü2.57 trillion, falling £Ü920 billion or 26.4% from the £Ü3.49 trillion at the end of last year.

In the future, we will concentrate efforts on raising corporate value by improving our financial structure and reducing financial expenses.

Providing the best quality products and services is how Hyundai Heavy Industries promotes its business philosophy of prospering together with our customers. We serve our own interests best by serving those of our customers and business partners first.

We cordially ask for your continued support and patronage.