Business Performance

Brisk order performance
HHI won new orders worth $6.83 billion as of the end of August, meeting 93.3% of its annual order target.
The Shipbuilding Division won orders for a total of 95 vessels (about 7 million GT) worth $4.83 billion, with oil tankers and containerships taking the major share (51 oil tankers, 42 containerships and two others). Having thus secured a stable workload in the first half of the year, the division restarted order-winning activities in September after taking a breather, negotiating higher vessel prices and adjusting delivery schedules.

Stable backlog secured
As of the end of August, the Shipbuilding Division¡¯s backlog stood at 170 vessels (76 oil tankers, 68 containerships, six LNG carriers, six bulk carriers, six special & naval ships and five others), worth $8.35 billion in total (11.65 mil. GT). It is noteworthy that 5,000 TEU-class or larger vessels account for more than half of the orders for containerships, and 150,000dwt-class or larger vessels take up about 40% of the orders for oil tankers, indicating that high value-added ships constitute a major portion of total orders received.

Increase in LNG carrier demand
More orders for LNG carriers are expected. Global LNG consumption is projected to grow 2.8% annually, compared to 1.8% and 1.5% for crude oil and coal, respectively. With LNG carrier prices expected to rise from their current historic low of $150 million, HHI is making preparations to win orders for both moss- and membrane-type units in the future.

Typhoon Maemi inflicts minor damage
Thanks to thorough preventive measure for vessels moored at the quay, HHI was able to keep to a minimum the losses incurred from Typhoon Maemi, which swept through the southeastern provinces during Korea¡¯s thanksgiving holidays. The company¡¯s losses will not be all that substantial, as the vessels are covered by insurance, and damage caused by natural disaster is exempted by the force majeure clause.

HHI's Stock Price

HHI¡¯s stock price continued the steady upward trajectory it has followed since the beginning of the year, recording 31,350 won on August 22 amid a boom in business. It recently showed some weakness owing to fears over the potential impact of damage caused by Typhoon Maemi. However, the company¡¯s losses have turned out to be minor, and share prices of domestic shipbuilders should remain bullish amid the current business boom and rising vessel prices.

HHI¡¯s Equity Change
Hyundai Heavy Industries sold 3.8 million shares of its treasury stock totaling 119.7 billion won to Hyundai Mipo Dockyard at 31,500 won per share on Oct. 16, 2003. The sold shares are equal to 5% of the total outstanding shares (76,000,000 shares). HHI expects this sale will stabilize the company¡¯s equity base and improve its overall financial structure.
Accordingly, of the total outstanding shares, Chung Moon-joon, Korea Chemical Co. and Hyundai Mipo Dockyard own 10.9%, 8.2% and 5%, respectively.

Public Notice
• Disposal of securities to the largest shareholder (September 22, 2003)
• Name of Company: Hyundai Samho Heavy Industries Co., Ltd.
• Details of Securities Transaction
  - Date of Transaction: September 22, 2003
  - Object of Transaction: 4,040,936 shares of Hyundai Mipo Dockyard¡¯s common stocks
  - Amount of Transaction: £Ü36,489,652,080
• Purpose of Transaction: Improvement of financial structure
• New Contract (Sept. 25, 2003)
  - Project: Five 6,800 TEU containerships
  - Contract Price: £Ü396,801,436,500
  - Owner: Multimarine Limited and 4 others
  - Payment Terms: Cash
  - Contract Date: Sept. 25, 2003