Hyundai Heavy Expects “Difficult Year” Ahead – Targets $30.6B Orders In 2012

SEOUL (Dow Jones)–Hyundai Heavy Industries Co. (009540.SE), the world’s largest shipbuilder by order value, is targeting $30.6 billion in orders and sales of KRW27.6 trillion ($23.85 billion) in 2012, although it expects a “very difficult year” because of the European debt crisis.

“We are having difficulty in predicting business environments (for the year) due to volatility in currency exchange rates and raw materials prices,” the Ulsan-based shipyard said in a statement.

The 2012 annual order and sales targets are up 19.6% and 9.5%, respectively, from its results in 2011, when it booked $25.54 billion in orders and KRW25.2 trillion in sales. Sales are based on cumulative orders that are realized.

In 2011, the company missed its annual targets of $26.63 billion in orders and KRW26.945 trillion in sales.

Shipbuilders, including Hyundai Heavy, are stepping up their efforts to diversify their business portfolios as demand for commercial ships, such as container carriers and bulk carriers, remains weak.

Of its seven business divisions, Hyundai Heavy is putting more focus on offshore facilities such as drill ships, increasing its order target to $5.2 billion this year from the $4.8 billion target in 2011. It has bid for some mega projects, including building a floating production storage & offloading unit worth up to $3.5 billion in Nigeria, Kang Chang-june, senior executive vice president in charge of the offshore & engineering division, told Dow Jones Newswires in late December.

-By Kyong-Ae Choi and Min Jeong Lee, Dow Jones Newswires

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