Leaping Forward into a Bright New Future

HDEC reconfirmed as Korea's No. 1 overseas construction contractor

Hyundai Engineering & Construction Co. Ltd (HDEC)'s history is synonymous with that of Korea's construction industry as the company has been a driving force in the development of the industry since its establishment in 1947, brining a pioneering and creative spirit to all its areas of operations: civil, building, plant, and electrical works.
Since entering the overseas markets in 1965, HDEC has established a worldwide reputation by completing a multitude of projects in a timely, efficient, and cost-effective manner.
HDEC has been reconfirmed as Korea's No. 1 overseas construction contractor as the company topped the top 10 list of Korean E&Cs which were awarded with a thank-you plaque on May 17 in recognition of contributing to Korea's achieving the US$200 billion mark in the accumulative value of construction orders that they have been landed abroad. The overseas projects awarded with HDEC so far were tallied at 628 projects worth U.S.$49,629 million, which accounts for nearly one-fourth of Korea's aggregate.
Overcoming financial woes, HDEC has realized record-high earnings every year since 2001 by stressing the need for profit-oriented order taking and exhaustive cost management, As a result of this fiscal prudence, the company's level of financial soundness has grown exponentially.
HDEC was officially taken out of its debt workout program on May 25, emerging fresh from four and half a years of rehabilitation program led by banks.
HDEC President-CEO Lee Jong-soo recalled, "Operating income, net income, and share value all grew dramatically to such an extent that we ranked first in market value in our field. These successes flowed from our insistence on profit-oriented management. Other contributing factors were a significant improvement in our cost of sales to sales ratio and steep declines in interests and commission expenses." "Last August, our land in Taean, South Chungcheong Province, was chosen as the site for a future model corporate city.
We obtained approval for the reclamation of this land from the government in 1978, and established a large farm there. As a consequence of this new designation, the property will be recast a futuristic tourism- and leisure-oriented city, contributing immeasurably to Korea's balanced territorial growth and the development of the local community,"he said.
"We also recouped long-due accounts receivable worth $681 million from Iraq. This should significantly improve our earnings and our financial structure,"CEO Lee said.
Despite largely unfavorable operational environment facing HDEC, he said, orders it received ballooned by 11.6 percent over the year to $8.0 billion in 2005. Most of the increase represented new orders from the Middle East. At year-end, HDEC had a backlog of orders with a gross value of $25 billion, equivalent of at least five years'worth of projects ahead of it, according to the HDEC president.
Even though sales decreased by 7.8 percent year-on-year to $4.2 billion, net income rose to $322 million, an increase of 90 percent and the company's strongest showing ever. The increase was occasioned by improvements in non-operating revenues and reductions in interest expenses.
LEAPING FORWARD INTO FUTURE. HDEC President Lee said, "This year, we will focus on three management objectives. They can be summarized in our new motto: "leaping forward into a bright new future."First, he said, HDEC will practice ethical and transparent management. "We will translate these words into action by developing a healthy corporate culture, generating earnings through fair and equable competition, and fulfilling our social responsibility."Secondly, Lee said, management will become more customer-oriented." "A company's success depends on the faith and trust of the people with whom it deals. To augment the confidence of our customers, we will improve the quality of our work and services and enhance our corporate image." "Lastly, we will develop new growth engines. Technology and talent are a construction company's most cherished assets. With this in mind, we will development new technologies and hire creative and innovative people. In addition, we will focus on securing long-term growth engines including the corporate city in Taean."During 2006, HDEC aims to realize $8.2 billion worth of new orders - $6 billion domestically and $2.2 billion from overseas. The company forecasts that total sales will reach $5 billion including domestic sales of $3.9 billion and overseas sales of $1.1 billion, while net income will be over $350 million.
Take a look into business achievements the company made during 2005. In February 2005, HDEC completed phases 4 & 5 onshore facilities at the South Pars Field in Iran in 35 months, the shortest time record in the history of large-scale plant facilities construction. The company was awarded with the $1.6 billion order for an ultra-large natural gas refinery form ENI IRAN BV in March 2002. Consisting of the construction of facilities for treating and refining natural gas compounds that are transported by underwater pipeline form the South Pars gas fields in the Persian Gulf. The daily capacity of the plant is 2 billion cubic feet. HDEC has set several new records during the course of completion of the phases 4&5 project.
In May 2005, HDEC received the grand prize at the "2005 Best Buildable Design Awards"ceremony from the Government of Singapore's Building and Construction Authority (BCA) for the Goldenhill Park Condominium in recognition of creativity in design and quality of construction. The BCA examines the designs of buildings that have been completed in the preceding year and bestows awards on projects of unrivaled excellence. HDEC won the grand prize for structures of more than 25,000 square meters in size.
In October 2005, the company completed section 3 of the Cheonggyecheon Stream Restoration Project in Seoul. The monumental development involved the construction of five bridges, a series of two-lane roads, the restoration of a 1.7 km stream, sewerage, and landscaping.
In the future, HDEC said it will continue its quest to maximize customer satisfaction and shareholder value. It will strive to grow into a worldwide industry leader that enjoys the confidence of its customers and the market, deploying its technological acumen in the service of a better future. nw

HDEC President-CEO Lee Jong-soo

New Oil Pier and associated "topside"Facilities

South Pars Project Phase IV & V in Iran, undertaken by Hyundai Engineering & Construction