ULSAN < invest Korea

According to Yonhap News,

(SEOUL=Yonhap News) Hyundai Heavy Industries Co., and its newly spun-off affiliates, said Monday that they plan to spend a combined 3.5 trillion won (US$3.14 billion) on research and development over the next five years to stay competitive in each of their respective businesses.

The figure includes some 400 billion won for facility expansion, according to the companies.

Last month, shareholders of Hyundai Heavy approved the company's plan to hive off its noncore businesses, aimed at what it claims will boost each business unit's competitiveness.

Under the plan, the shipyard split into four independent entities: shipbuilding, electronics, construction equipment and robotics. The trading of Hyundai Heavy shares will be suspended from March 30 through May 9.

"Each unit will strive to be among the top five in the world in each business area helped by the use of cutting-edge technologies and improved product quality," corporate sources said.

The shake-up comes as part of a broader effort by the troubled shipyard to salvage itself from high indebtedness. The spinoff is expected to reduce the shipyard's debt ratio to 95 percent from 106 percent at the end of last year.

Hyundai Heavy swung to the black last year from a year earlier, thanks in part to reduced costs and improvement in its non-shipbuilding business.

Net income came to 682 billion won last year on a consolidation basis, a turnaround from a loss of 1.36 trillion won a year earlier.

Sales dropped 15 percent on-year to reach 39.32 trillion won, while it logged an operating profit of 1.64 trillion won, a rebound from an operating loss of 1.54 trillion won tallied in the same period the year before, it said earlier.

sam@yna.co.kr

Copyrights Yonhap News. All Rights Reserved. 

Reprint or redistribution without permission is prohibited.