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Hyundai Heavy Industries profits soar on pricier ship orders

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Hyundai Heavy Industries Co., the world's largest shipbuilder, said Thursday its fourth-quarter and annual profits soared on increased orders and higher prices.

Hyundai Heavy earned 295.7 billion won (US$315 million; euro242 million) in the three months ended Dec. 31, the company said, more than quadrupling from 69.6 million won in the same period the year before. Sales rose 27 per cent to 3.6 trillion won (US$3.8 billion; euro2.9 billion).

Full-year results were similarly strong.

For all of 2006, Hyundai said it earned 712.8 billion won (US$760 million; euro584 million), nearly quadrupling from 183.3 billion won in 2005. Sales rose 21 per cent to 12.6 trillion won (US$13.4 billion; euro10.3 billion).

Ulsan, South Korea-based Hyundai Heavy, established in 1972, in just three decades rose to become the world's largest shipbuilder.

The company also designs and builds offshore facilities such as oil rigs and pipelines. It also manufactures marine terminals, power facilities, desalination plants, construction equipment and industrial robots.

A doubling in prices for the industry benchmark ship, the so-called very large crude oil carrier, to as much as US$130 million between 2003 and 2005 boosted results, said Hyundai Heavy spokesman Juno Kim.

``Last year the super large container ship market was very good,'' he said.

The company delivered 79 ships last year compared with 69 in 2005, Kim said.

He added that a change in safety requirements for crude oil carriers has also led to an increase in orders to replace older ships.

As of the end of 2006, Hyundai heavy had an order backlog of 278 ships valued at US$23.1 billion (euro17.8 billion).

``We have orders for the next three years,'' Kim said.

The company was formerly part of the massive family-run Hyundai conglomerate, at one time South Korea's largest business empire with interests including ships, autos and computer chips.

The conglomerate broke up, however, in the aftermath of the 1997-98 Asian financial crisis into separate ones centered on former group companies. Hyundai Motor Co., for example, forms the nucleus of one of those groups.

Shares in Hyundai Heavy, which released earnings results after the stock market closed, rose three per cent to 139,500 won (US$149; euro114).

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Hyundai Heavy Industries profits soar on pricier ship orders
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