三星重工2007年年报.doc

Samsung Heavy Industries Annual Report 2007Innovating ChallengingDelivering ResultsCONTENTS00 Financial Highlights 02 CEO Letter 06 Board of Directors 08 At a Glance 09 Innovating, Challenging, Delivering Results 25 Counting Our Successes 37 Operations Overview 46 Sustainable Management 52 Milestones 53 Financials 86 Global Network 87 Investor InformationFiNaNCial HigHligHTS200720062005 Operating Results (in millions of Korean won) Revenue8,519,066 6,351,6905,546,704Operating income457,245 99,019(4,254)Income before income taxes658,542 212,52695,255Net income485,386 154,09774,256CAPEX626,372433,762400,683Balance Sheets (in millions of Korean won)Total assets10,560,624 8,989,185 6,827,640 Cash & marketable securities 2,595,8702,446,7961,394,703 Total liabilities8,750,700 6,767,042 4,899,301Interest-bearing debt 132,059 128,64084,973Shareholders equity1,809,9242,222,142 1,928,3393020100Revenuein millions of Korean won8,519,066 6,351,6905,546,70420100Operating incomein millions of Korean won457,24599,019(4,254)3020100Total assetsin millions of Korean won16.226.322.510,560,6248,989,1856,827,64024.050403020100Shareholders equityin millions of Korean won49.142.132.61,809,9242,222,142 1,928,339070605070605070605070605200720062005Financial Ratios (%) Net operating margin 5.4 1.6 (0.1)Net income margin 5.72.4 1.3 Debt-to-equity* 7.35.8 4.4Return on equity26.8 6.9 3.9Return on assets 4.6 1.7 1.1Shareholder Structure (%) Related parties 24.25 24.25 24.25 Treasury stock 5.90 1.01 1.24Foreign28.81 35.11 36.74Institutional 10.04 11.33 12.12Individual 31.0028.30 25.65(*) Debt-to-equity ratio = Interest-bearing debt/Shareholders equityCONTENTS00 Financial Highlights 0 CEO Letter 06 Board of Directors 08 At a Glance 09 Innovating, Challenging, Delivering Results 5 Counting Our Successes 37 Operations Overview 46 Sustainable Management 5 Milestones 53 Financials 86 Global Network 87 Investor InformationSAMSUNG HEAVY INDUSTRIESNo matter how you measure it, 2007 was our most successful year ever. We took in a record-breaking number of orders, launched world-class ships, introduced new technologies that further streamline the manufacturing process and thoroughly satisfed our customers needs. In 2007, we solidifed our reputation as a superior shipbuilder, construction manager, engineering company, and digital technology supplier.Samsung Heavy IndustriesA YEAR OF INNOVATION, CHALLENGE, AND RELIABILITY I believe we are on the right path to achieve our goal of being a world-leading company by the year 00.3SAMSUNG HEAVY INDUSTRIESCEO LETTERTO OUR ESTEEMED CUSTOMERS, SHAREHOLDERS, and BUSINESS PARTNERS:I am pleased to report that Samsung Heavy Industries had a successful year in 007. Our fnancial results were very satisfying, with reported KRW8.5 trillion in turnover, KRW658.5 billion in ordinary income, and KRW485.4 billion in net income. Thanks to our excellent numbers, we were able to pay a 0 percent cash dividend to shareholders.In 007, SHI realized recordbreaking order receipts of US$. billion, the highest in our history. It was a great year in terms of the quality of orders we received, with high value-added vessels (such as super-sized container ships, LNG carriers, and drillships) representing 84 percent of our orders.In particular, 0 of the orders we received were for drillships, out of a total of 4 placed worldwide, solidifying our position in this market. We maintained our No. position in the super-sized container ship and LNG carrier markets, recording 34 orders out of 33 and out of 3 placed respectively worldwide. I believe we are on the right path to achieve our goal of being a world-leading company by the year 00.We introduced a new shipbuilding system called the tera-block method, which allows ship assembly from two large ship blocks. This represents an evolution of our mega-block method we debuted in 00, which used ten large ship blocks. Now, terablock requires just two. By successfully applying technological innovations such as block building and underwater construction, we have dramatically reduced dock-based shipbuilding time. In 007 every one of the 48 ships we delivered was defect-free. We also constructed one of the worlds largest ofshore structures, the Sakhalin Piltun B platform, and introduced the worlds frst Arctic shuttle tanker and Arctic drillships. In China, our Ningbo Plant completed its Phase 3 facility expansion plan, increasing annual production capacity from 0,000 tons to 00,000 tons. Our Rongcheng Plant in Shandong concluded Phase facility construction and is currently in operation.SHI design and engineering centers for shipbuilding and ofshore facilities in the United States and India are expected to expand our basic design capacity from 5 platforms annually to by the year 0. In 007, SHI developed 9 types of new vessels, including the worlds largest container ship at 6,000TEU, compressed natural gas carriers, and novel, concept-based drillships. These solidify our reputation as a pioneer in new markets. In 007, our Construction & Engineering division outperformed its order targets as in 006, despite unfavorable construction market conditions. The division is meeting customer satisfaction with industry-leading safety and perfect quality through ongoing safety management and quality innovation. The C&E division is expanding in housing and civil engineering markets, and also enhancing the quality of its products. 4TAEAN INCIDENTLate in the 007, we learned of the unfortunate oil spill that took place near the Port of Daesan on the Yellow Sea coast of Taean county. As most are aware, this accident occurred when a crane barge operated by Samsung Heavy Industries collided with the Hong Kong-registered crude oil tanker Hebei Spirit. Unanticipated weather conditions were a major cause of the incident. Since the incident, SHI has given top priority to disaster recovery, fully acknowledging our social responsibilities. In addition, we have pledged KRW00 billion in fnancial aid to the afected region and have ofered disaster aid plans to assist with recovery of the ecosystem in the area. We deeply regret this incident, and the distress it has caused residents of the area and our country. We appreciate the support and encouragement our shareholders and partners have ofered as this crisis unfolded, and the resolve of our executives and employees to help ofset our fnancial contributions through cost savings and productivity enhancements.THE YEAR AHEADWe anticipate a challenging year ahead. The efect of the subprime mortgage crisis in the United States is being felt around the world, and projected to continue to impact fnancial markets and slow the global economy. The price of oil is another risk factor. Meanwhile, competitors in Korea and China are expanding facilities, exerting pressure on the availability and price of steel. In order to overcome such difculties, we will work to continue our sustainable growth with following strategies. We have established an initiative that we believe will help us achieve our goal of becoming a world-leading company by 00. It has three parts: promotion of new projects and products, encouraging creative innovation, and maintaining the highest standards of safety and quality.5SAMSUNG HEAVY INDUSTRIESKEYS TO SUSTAINABLE GROWTHPromoting new projects and products has proven key to sustainable growth time and time again. The ideal time to actively identify new business opportunities and develop new products is now, just as the shipbuilding industry gains momentum in world markets. We plan to capitalize on this momentum, and develop natural resources under the sea, as well as create a long-term plan to enter the prosperous cruise ship market.Creative innovation is our second initiative. We have already seen the benefts of ingenious eforts such as our foating dock and mega block systems which enable shipbuilding at sea. These alone have expanded shipbuilding capacity from 30 to 50 vessels a year. Our Arctic shuttle tanker is another example of a creative breakthrough. We seek creativity from the bottom up in our organization. It can come from anywhere, at any time. We truly believe the most inconsequential inquiry can change the future of our organization. We actively promote company-wide participation in the process of creative innovation, and encourage continuous improvement of existing processes and technologies.Third, we must insist on the highest standards of safety and quality. Sustainable growth cannot be achieved without ensuring safety. Further enhancing current safety standards is all the more essential in this time of growth. Quality enhancement is equally critical. Safety and quality go hand-in-hand with competitive success.We would like to thank our employees, our shareholders, our customers, and our business partners for helping us make 007 one of our most successful years in history, and look forward to working closely with you in the years to come.Respectfully,Jing-Wan KimPresident and Chief Executive Ofcer6BOARD OF DIRECTORSDIRECTORS Jing-Wan Kim 1 President, Chief Executive OfcerChairman, Korean-Norwegian Economic Cooperation Committee Chairman, Korean-Swedish Economic Cooperation CommitteeChairman, Korean-Finnish Economic Cooperation CommitteeHyung-Keun Seo 2 Executive Vice President, C&E DivisionSeo-Yoon Kim 3 Executive Vice President, Chief Financial Ofcer Joong-Suk Koh 4Outside Director AttorneyJudge, the Constitutional Court of KoreaSoo-Il Sohn 5Outside Director Vice President, Korea Development BankHang-Shoon Choi 6Outside Director Professor, Department of Naval Architecture and Ocean Engineering, Seoul National UniversitySuk-Hwan Park 7 Outside Director President, Jungbu Regional Tax Ofces, National Tax Service Current Title Other Principal Directorship & Titles Former Titles 37SAMSUNG HEAVY INDUSTRIESCORPORATE GOvERNANCEThe Samsung Heavy Industries Board of Directors reviews, analyzes, and executes major management issues regarding SHIs basic policies and operations, with the exception of decisions made at general meetings based on the by-laws and articles of the company. There are seven members of the Board of Directors, of which three are Samsung executive directors and four are independent of the company. The term of ofce for each director is three years. Directors support the CEO and are responsible for specifc tasks determined by the Board, including serving on committees of the Board. These committees include the Audit Committee, responsible for auditing company management, accounting, fnancial status, and reporting on these matters at meetings. The Audit Committee is composed of three independent directors. The Chairman of the Board determines when meetings will be held and chairs the meetings of the Board. Decisions are made by majority vote of the participating directors. At least four directors must be present to constitute a quorum. The Chief Executive Ofcer is nominated by the Board. The CEO executes decisions and manages overall operations of the company. The business of the Board includes calling for general meetings, revision of management policy, alterations of organizational structure and regulations, issuance of new stock or company bonds, borrowing of funds, and investments.The Board of Directors is committed to complying with all laws and the principles of ethical practices, and to forward the companys stated standards of maintaining a clean organizational culture; respecting customers, shareholders, and employees, caring for health, safety, and the environment; and being a socially responsible corporate citizen. 56478AT A GLANCEA Year of Record-breaking OrdersSHI broke all records in company history in 007, with US$. billion in orders placed. 84 percent of orders received were for high value-added ships, including 34 super-sized container ships, LNG carriers, 0 drillships, and FPSOs. SHI holds the worlds No. market share position for orders received in several vessel types. Ship Block Plants in China SHI expanded ship block production capacity in Ningbo, China in June, completed the frst phase of construction of a plant in Rongcheng in September and, anticipates annual production capacity by 009 of 500,000 tons of ship blocks. This will result in production of 70 ships per year by 00, 0 more than its current capacity of 50 ships. Shipbuilding Payments in Korean Won SHI received payment for its shipbuilding work in Korean won instead of US dollars, a frst in Korean shipbuilding industry. This allows SHI to hedge against exchange rate fuctuations, protecting profts while contributing to the stable exchange market situation.The Worlds Largest Ofshore PlatformOn May 9, SHI christened the worlds largest ofshore platform, the Piltun B, which can produce and drill for crude oil and gas simultaneously. Construction began in January 004 and took 4 months to complete. Piltun B can endure extreme weather conditions, as well as to withstand a seismic intensity of 7 on the Omori scale. Ships for the Arctic Region SHI delivered an Arctic region running drillship, the Stena Drillmax, which can drill for crude oil and gas in deep sea areas unreachable by ofshore platforms. SHI also launched an Artic shuttle tanker commissioned in 005 by Sovcomfot of Russia, the frst of three ships ordered.Block Plant Near Geoje ShipyardSHI made plans to construct a mega-block factory with a 00,000 ton capacity across from the Geoje Shipyard, separated by water, enabling transport via sea. Development of the plot is expected to vitalize the regional economy, expanding production by US$585 million (KRW550 billion) annually, and create about 6,000 new jobs.Tera-Block Construction MethodSHI held a keel laying ceremony in October for the frst vessel in the world built using the tera-block construction method. This technology constructs vessels by putting together two ultra-large blocks. Using tera-block con-struction shortens the dock periods by about a week, increasing turnover. Creative Innovation Idea CompetitionSHI held a company-wide competition for a Creative Innovation Idea in early 007. More than 90 percent of SHIs ,000 employees participated, submitting 30,000 ideas. The Grand Prize was awarded for a method that increases shipbuilding capacity by more than 0 percent. Applying the ideas selected for prizes is expected to produce a KRW00 billion increase in net proft.The Waterproof AcademySHI C&E division introduced its Waterproof Academy in March, 007. Equipped with a training and testing center, it ofers education in advanced waterproof technology and construction standards developed by SHI. The Waterproof Academy has produced technologies that have signifcantly enhanced the construction of waterproof buildings and structures. Design Awards SHIs Digital Business team won the President Award from the Korea Institute of Design Promotion in Good Design 007 for its Samsung Ship Automation System Master, as well as iF Product Awards for other products. The iF Award is one of three most prestigious design awards in the world. 9SAMSUNG HEAVY INDUSTRIES1INNOVATING, CHALLENGING, DELIVERING RESULTSInnovation, challenge, and reliability are the three inextricably entwined elements of success at Samsung Heavy Industries. Each individually provides a beacon to direct our company towards its goal of leading the world with products that are the best-in-class.10Innovation. It is an integral component of the culture at Samsung Heavy Industries.SHI actively promotes innovation in the way our people think, in what they produce, in how they produce it, and the services they ofer.11SAMSUNG HEAVY INDUSTRIESWorlds First Arctic shuttle tAnker recognized as a Best Vessel of 2007, shis Arctic shuttle tanker can turn 360 degrees to break ice in its path, setting a new course. it will greatly improve crude oil transportation in the Arctic regions of the world, operating safely at extremely low temperatures. 12Innovation is responsible for our growth in the past, and is essential to our growth in the future. It is what creates value for our customers, and what fuels our compelling quest to continually increase productivity and quality of our products and service. Thinking “outside the box” at SHI has led to remarkable creative innovations.In 2007, we introduced the worlds frst Arctic shuttle tanker, capable of rotating 360 degrees in ice to fnd travel routes in extremely cold weather.13SAMSUNG HEAVY INDUSTRIESterA-Block constructionBlock construction methods utilized by samsung heavy industries dramatically reduce dock periods, and have progressively revolutionized vessel construction. Block construction has evolved from mega (10 blocks) to giga (5 blocks) to now tera blocks (just two, ultra-large).14Worlds First drillship For the ArcticStena Drillmax