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04 05MESSAGE FROM CEO
strategies to enhance margins and adjust the management of worksites in Korea
and abroad. We will also improve our IT-based integrated project management
system that was put in place last year. We will also ensure profitability in the
housing business by concentrating on in-house development projects in prime
residential areas, such as Wirye New Town and the Hanam Misa District. In
addition, we will enhance our brand image by building local landmarks.
Our management slogan for 2013 is “EPC Innovation,” which reflects our
commitment to taking the necessary steps to ensure sustainable growth and
continued development in global markets. EPC Innovation stands for Efficiency
Innovation, Process Innovation and Cost Innovation.
Efficiency Innovation focuses on preemptively reducing potential risks, openly
and immediately sharing information and effectively adopting a timely decision-
making process. We plan to reach these goals by efficiently managing our entire
project cycle, ranging from estimates, bidding and contracts to construction
and completion. Our processes will be based on our recently upgraded IT
infrastructure to which I have referred.
Process Innovation refers to revamping all business processes to enhance
competitiveness. This includes undertaking exhaustive feasibility studies
of projects and analyzing projects based on several categories, including
procedures, business areas and sectors. Order taking and contract preparation
will be included, in addition to project mobilization and project construction and
completion.
Cost Innovation will be the end result of Efficiency Innovation and Process
Innovation. This strategy is aimed at bolstering cost competitiveness by
innovating project management from order receipt to completion. This includes
enhancing the efficiency of our organizations and human resources and
reinforcing profitability, including lower sales and administrative expenses by
implementing a company-wide integrated management process.
Despite the threat from intensifying competition and reduced orders, Daewoo
E&C has set a 2013 new order goal of KRW 16 trillion. We are also targeting KRW
9.3 trillion in sales and KRW 423.0 billion in operating profit. Given the challenging
environment at home and abroad, it will be difficult to achieve these goals.
However, I am certain we will succeed if we harness all our energies and make
optimal use of our capabilities, expertise and experience. This will be especially
true in relation to our overseas business results.
Last, but not least, Daewoo E&C will continue to build the market’s trust by
fulfilling our corporate social responsibilities and practicing open & ethical
management.
I look forward to your continuing interest and encouragement.
Thank you.
DAEWOO E&C WILL
CONTINUE TO BUILD UP
THE MARKET'S TRUST
BY FULFILLING
ITS CORPORATE SOCIAL
RESPONSIBILITIES AND
PRACTICING OPEN &
ETHICAL MANAGEMENT
DEAR VALUED SHAREHOLDERS:
2012 was an eventful year for the world’s economy. The sovereign debt crisis
continued in the Eurozone, adding even more downward pressure to the global
economic slump.
The world’s economy has become increasingly interconnected so that turbulence
in one country typically expands into regional and potentially global problems.
This was certainly the case in Korea as the slow global economy continued to
erode domestic demand, evidenced by a marked reduction in export volume
and a depressed construction market. More than thirty of the nation’s top one-
hundred construction contractors entered court receivership last year, while
average household debt spiraled upward to over KRW 1,000 trillion and the
bottom fell out of the real estate market.
Given the dire economic conditions, I am proud to announce that Daewoo E&C
posted satisfactory results over the year, including KRW 13,812.4 billion in orders
received, KRW 8,180.3 billion in sales and KRW 365.2 billion in operating profit.
Our overseas business continued to expand last year, becoming an increasingly
important component of our operations. We recorded compound annual growth
rate of 32% in overseas orders over the past five years, both in traditional market,
such as Libya and Nigeria, and new markets, including Algeria and Morocco.
Profitability in our overseas business also continued to grow, recording gross
margins of 8.6% in 2011 and 8.9% in 2012.
Given the ongoing slowdown in the local construction and real estate markets,
we chose to focus on the overseas business. This includes expanding human
resource capabilities and upgrading organizations and systems to bolster our
existing strength in engineering and procurement. Accordingly, we were able to
aggressively pursue order growth for engineering, procurement and construction
(EPC) projects in the Middle East and North Africa. We also diversified our
business portfolio by establishing partnerships with leading EPC players, such as
Japanese corporations. I am confident these decisions will yield excellent results
for our overseas business again in 2013.
Our industry-leading capabilities combined with our successful bids on overseas
megaprojects will cement stable revenue going forward. Our future projects
include the Ras Djinet combined-cycle power plant and the El Harrach river
restoration project in Algeria, the Jazan refinery in Saudi Arabia and the Jorf
Lasfar fertilizer plant in Morocco. We also bolstered our liquidity by disposing
non-core assets, such as the Hanoi Daewoo Hotel in Vietnam and the Guilin
Daewoo Hotel in China.
In 2013, we forecast slow growth for both Korea and the rest of the world, in terms
of business investments and transactions, given the ongoing concerns about the
sovereign debt crisis in Europe and the ongoing slump in the US. Our response to
these conditions will be to focus on stable, profitable and practical management.
We are currently revamping our operations to ensure a sustained focus on both
quantitative and qualitative growth. This includes cutting costs, expanding the
EPC business and bolstering risk management processes, as well as adopting new
SEO, JONG-UK
PRESIDENT & CEO
SEO, JONG-UK
PRESIDENT & CEO
06 07COMPANY HISTORY BUSINESS OVERVIEW
2012- Published sustainability report
- Began construction of Ras Djinet combined-cycle power plant
- Won order for Jazan Refinery, Package 12, in Saudi Arabia
2011- Won the Oman Sur Independent Power Plant (2011~2014)
- Won the Saudi Arabia RTIP Tank Farm Project (PKG 1&2)
(2012~2015)
- Won the Malaysia IB Tower Project (2011~2014)
- Received the Grand Prize for Civil Engineering Structure
of the Year 2011 from the Korean Society of Civil Engineers
(Busan-Geoje Fixed Link(Geoga Daero))
2010- Won the contract for the first overseas export of a research
reactor (Jordan)
- Began construction of Ruwais Refinery Expansion-Tankage project
(2010~2014) in the UAE
- Opened “Busan-Geoje Fixed Link (Geoga Daero)”, the world’s
deepest and Korea’s very first automobiles-only immersed tunnel
- Signed M&A agreement with Korea Development Bank
2009- Won the Seoul DMC Landmark Building (2009~2015)
- Won the Libya Tripoli Waterfront Hotel (2009~2012)
- President and CEO Seo, Jong-uk received Golden Tower Order of
Industrial Medal
2008- Ranked first in the Construction Capability Evaluation (for three
consecutive years)
- Received grand prize in the “Korea Residential Service Award”
2007- Ranked first in the Construction Capability Evaluation (for two
consecutive years)
- Selected as the best in quality service survey by women
consumers for Prugio
- Received grand prize in the Engineering and Construction
Technology Awards of Korea
2006- Ranked first in the Construction Capability Evaluation
- Joined Kumho Asiana Group as an affiliate
2005- Received the Presidential Award in the 9th Most Livable
Apartment Contest (Gireum Prugio)
2004- Began construction of the nation’s 1st and the world’s biggest
tidal power plant (Sihwa Lake Tidal Power Plant, 2004~2009)
- Began construction of the 1st submersible tunnel in Korea
(private-invested Busan-Geoje Fixed Link Project, 2004~2010)
2003- Completed the Corporate Restructuring and Improvement Work
- Launched new apartment complex brand, Prugio
2001- Received Best Knowledge Management Award from Korea
Management Association
2000- Established as an independent corporate entity
- Received Presidential Award for Daewoo Institute of Construction
Technology (DICT)
1999- Began construction of the longest tunnel in Korea
( Yeongdong railway track relocation project between Dongbaeksan &
Dogye, 1999~2007)
1993- Obtained the ISO 9000 certification, a first among construction
companies in Korea
- Began construction of Houay Ho Dam in Laos (1993~1997)
1992- Began construction of motorway in Pakistan (1992~1997)
- Began construction of Wolsong Nuclear Power Plant Units 3 & 4
(1992~1999)
1988- Entered the US construction market, a first among construction
companies in Korea
(residential area for elderly retirees in Seattle, 1988~2003)
1985 - Began construction of the first cogeneration power plant in Korea
(Mokdong Cogeneration Power Plant, 1985~1987)
1984 - Received the US$ 4 Billion Construction Export Tower award
(Ranked 15th among Top Global Contractors by ENR)
1983 - Established Daewoo Institute of Construction Technology (DICT),
an industry first in Korea
- Began construction of Suyeong Bay Olympic Yacht Marina
(the world’s largest, 1983~1987)
1982- Daewoo Co., Ltd. was established (construction / trading sectors)
1979 - Began construction of the first turn-key project in Korea
(Daejeon Depot, 1979~1984)
1978 - Advanced into Libya (Garinius Medical School, 1978~1982)
- Began construction of Dongjak Grand Bridge (1978~1984)
1976 - Obtained international contractor certification
- Advanced into Ecuador, a first among Korean construction companies
1973 - Established as Daewoo Construction Co., Ltd.
Companies across the globe faced significant challenges in 2012. This was particularly true for E&C
companies due to the downturn in construction and property markets and the growing competition
overseas.
Daewoo E&C posted satisfactory results despite these hurdles, securing KRW 13,812.4 billion in
orders, KRW 8,180.3 billion in sales and KRW 365.2 billion in operating profit. Our overseas business
continued to grow, comprising 46% of orders and 42% of sales.
We reinforced worksite management functions by developing a project management system that is
fully integrated with all of our EPC processes. We also upgraded our systems to analyze worksites
promptly and accurately to expedite the decision-making process, in addition to revamping our
operations to ensure a more profit-orientated and practical business management. This includes
making adjustments to our system of categorizing operations by division, and creating a special
office to oversee risk management processes.
Our overall goal is to strengthen our foundation to grow into a global EPC leader via profit-
orientated management and steadily expand our overseas business.
Summary of Three-Year Trailing Business Performance
and Financial Position (Unit: In millions of KRW)
Sales
2010
6,719,0627,031,864
8,180,269
2011 2012
Net profit Total Assets Total Equity
2010
(813,601)
226,757
159,399
2011 2012 2010
9,459,489
8,984,782
9,357,600
2011 2012 2010
3,255,130
3,360,445
3,395,670
2011 2012
BUISNESS OVERVIEW 08 09
01
02 03
01
02 03
The civil project business posted KRW 1,383.2 billion in orders and KRW 1,395.5
billion in sales in 2012, despite difficult domestic market conditions. In 2013,
we are increasing our efforts to maximize operating profit by developing an
emergency management system, and we are targeting KRW 2,670.0 billion in
orders and KRW 1,500.0 billion in sales.
We won the grand prize in the civil engineering facilities segment of the Korean
Civil & Architecture Technology Award for a second consecutive year. This was
awarded for our successful completion of the Sihwa Tidal Power Plant, the
first such facility in Korea and the largest in the world. Other projects we are
conducting in Korea include the Honam and Gyeongbu high-speed railways and
the bio energy project in Daegu that will use the Daewoo Two-Phase Anaerobic
Bio-Gas System. Some of our overseas projects include the Boughzoul urban
development, Djen Djen port and El Harrach river restoration projects in Algeria
and a hydropower plant in Pakistan. Going forward, we plan to further diversify
our overseas business portfolio to include hydro and environmental facilities in
Thailand and environmental undertakings in Algeria.
CIVIL PROJECT BUSINESS
01 Hydropower Plant in Pakistan
02 Gyeongbu High-speed Railways
03 Sihwa Tidal Power Plant
The architecture business recorded KRW 3,502.3 billion in orders in 2012. This
success resulted from efforts to expand overseas operations, which will hopefully
emerge as a growth engine for the overall company. Our overseas expansion
included signing deals for new projects, such as the Scotts Tower in Singapore,
government facilities in Boughzoul, Algeria and the Matrade Center in Malaysia.
We also focused on securing orders for medical and educational facilities and
studio apartments.
Our “Prugio City” brand ranked first in the studio apartment category in the 2012
Korea Standard Premium Brand Index survey, reinforcing our position as Korea’s
leader in building studio apartments.
While we anticipate the global economic slowdown will continue, we are laying
the groundwork for sustainable growth by meeting or exceeding our goal
of KRW 3,040 billion in orders. We are also becoming more competitive in
overseas markets, focusing on Asia, the Middle East and Africa. In addition, we
will bid on projects to develop complexes and seek new business opportunities
in other regions. We believe we will reach our goal of KRW 2,100.0 billion in
sales by ensuring all of our operations are practical, profitable, optimized and
standardized.
ARCHITECTUREBUSINESS
01 Matrade Center in Malaysia
02 Scotts Tower in Singapore
03 Songdo I-Tower
BUISNESS OVERVIEW 10 11
01 01
0202 0303
In 2012, we conducted aggressive marketing in areas that we expected higher
housing demand. We were able to generate profits from this situation utilizing our
years of history in the housing sector, coupled with analysis of our DHSF(Daewoo
Housing Sales Forecast) housing demand forecasting tool. As a result, we supplied
13,087 new housing units and secured KRW 3,5431.5 billion in construction orders,
as we retained our leading position in both categories.
We have reinforced our competitiveness by innovating services and products
unique to our projects. This includes applying “My Premium,” a customized
housing product launched in 2011, to the Songpa Prugio and Wirye New Town.
In 2013, we will pursue a broad range of strategies to maximize customer
value and enhance our Prugio brand. We will also reinforce our capabilities by
establishing new inspection and defect detection systems to ensure product
quality. Accordingly, we will lead the housing market that will be increasingly
dominated by well-informed and thriftier buyers.
HOUSING BUSINESS
01 Siheung Prugio
02 Chungju Prugio
03 Songpa Prugio
The plant business secured KRW 3.3 trillion in orders and KRW 1.8 trillion in sales
in 2012, as we maintained our position as one of the leading players in the global
power plant market. Completed projects include the Afam VI power plant in
Nigeria, the Jorf Lasfar power plant in Morocco, the Sur power plant in Oman and
the S3 power plant in the UAE.
As for nuclear power plants, we completed the Shin Wolsong plant, and our work
received an A+ rating from an outside evaluation firm.
We also completed infrastructure construction for the Proton Accelerator
Research Center and the SMART ITL project, firming our position as a leading
NPP builder in Korea.
Plans for 2013 include utilizing our experience and expertise in EPC projects to
sustain our leadership in these markets. We will work with Korea Development
Bank to win more deals for independent power projects, which should emerge as
a growth engine going forward.
POWER PLANT BUSINESS
01 Misurata Power Plant in Libya
02 Afam VI Power Plant in Nigeria
03 Shin Wolsong Nuclear Power Plant
BUISNESS OVERVIEW 12 13
Activities in 2012 include completing an LNG production base in Pyeongtaek,
main piping work in Pyeongtaek and Yongin and LNG loading and uploading
facilities in Tongyeong. We also secured an order for gas and heat supply piping
work in Pocheon. Overseas activities include three more orders in Nigeria – the
Assa-North development, the Indorama fertilizer plant and the SSGGP. We also
won contracts for the Jorf Lafar fertilizer plant in the Sadara storage facility, the
Hout gas treatment plant and the Jazan refinery in Saudi Arabia.
In 2013, we plant to reinforce our position in Nigeria, Algeria and Saudi Arabia,
and explore promising new markets, such as Iraq and Venezuela.
OIL & GAS BUSINESS
01 Escravos GTL Plant in Nigeria
02 LNG Production Base in Pyeongtaek
03 Algeria Fertilizer Plant
We won contracts for Algeria’s Ras Djinet combined-cycle power plant and
El Harrach river restoration projects in 2012. The river restoration project
represented a new milestone in our overseas expansion activities, as this is the
first time Korean water resource management technologies will be implemented
in another country. We also won contracts for the Jazan refinery package 12 in
Saudi Arabia and the Scotts Tower in Singapore, as we extended our operations in
both countries.
Our goals for 2013 include servicing traditional markets in Nigeria, Algeria and
Malaysia, and penetrating new regions, such as South Africa, the CIS and Central
and South America.
OVERSEAS BUSINESS
01 Ras Djinet Combined-cycle Power Plant
02 El Harrach River Restoration Projects
01 01
02 0203
14 15REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Shareholders of DAEWOO ENGINEERING &
CONSTRUCTION CO., LTD.
We have audited the accompanying separate statements of financial position of
DAEWOO ENGINEERING & CONSTRUCTION CO., LTD. as of December 31, 2012
and 2011, and the related separate statements of income, comprehensive income,
changes in equity and cash flows for the years then ended, expressed in Korean
won. These separate financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these separate
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the Republic of Korea. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the separate
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the separate financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall separate financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the separate financial statements, referred to above, present
fairly, in all material respects, the financial position of DAEWOO ENGINEERING
& CONSTRUCTION CO., LTD. as of December 31, 2012 and 2011, and its financial
performance and cash flows for the years then ended, in accordance with
International Financial Reporting Standards as adopted by the Republic of Korea.
The amounts expressed in U.S. dollars are provided solely for the convenience
of the reader and have been translated on the basis set forth in Note 4 to the
accompanying separate financial statements.
Auditing standards and their application in practice vary among countries. The
procedures and practices used in the Republic of Korea to audit such financial
statements may differ from those gennerally accepted and applied in other
countries. Accordingly, this report is for use by those who are informed about
Korean auditing standards and their application in practies.
This report is effective as of March 19, 2013, the audit report date. Certain subsequent events of circumstances, which
may occur between the audit report date and the time of reading this report, could have a material impact on the
accompanying separate financial statements and notes thereto. Accordingly, the readers of the audit report should
understand that there is a possibillity that the above audit report may have to be revised to reflect the impact of such
subsequent events or circumstances, if any.
SEOUL, KOREA, MARCH 19, 2013
SEPARATE STATEMENTS OFFINANCIAL POSITION
DECEMBER 31, 2012 AND 2011
DEC 31
2012
DEC 31
2011
DEC 31
2012
DEC 31
2011
Assets
Current assets
Cash and cash equivalents 323,572 645,194 302,093 602,366
Financial instrument assets 22,413 42,767 20,925 39,928
Trade receivables 2,712,475 2,594,474 2,532,420 2,422,252
Other receivables 887,792 765,505 828,860 714,690
Advance payments 567,330 371,116 529,670 346,483
Prepaid expenses 332,437 354,279 310,370 330,762
Inventories 1,076,150 712,517 1,004,715 665,220
Assets held for sale 394,305 327,004 368,131 305,297
6,316,474 5,812,856 5,897,184 5,426,998
Non-current assets
Investments in subsidiaries and associates
457,890 472,353 427,495 440,999
Financial instrument assets 1,851 164,675 1,728 153,744
Investments in securities 715,942 731,038 668,418 682,511
Other receivables 849,436 794,977 793,050 742,207
Prepaid expenses 31,320 41,470 29,240 38,716
Investment property 189,874 192,238 177,270 179,477
Property, plant and equipment 175,341 180,491 163,702 168,510
Intangible assets 82,206 68,944 76,749 64,366
Deferred income tax assets 537,266 525,740 501,602 490,841
3,041,126 3,171,926 2,839,254 2,961,371
Total assets 9,357,600 8,984,782 8,736,438 8,388,369 $W W $
(in millions of Korean won and thousands of US dollars)
W $W $
16 17
DEC 31
2012
DEC 31
2011
DEC 31
2012
DEC 31
2011
Liabilities
Current liabilities
Financial instrument liabilities 1,363,846 931,050 1,273,313 869,247
Trade payables 465,412 672,073 434,518 627,461
Other payables 890,948 784,022 831,807 731,978
Advances received 1,081,620 1,036,605 1,009,822 967,795
Withholdings 99,969 83,679 93,333 78,124
Guarantee deposits received 45,582 40,086 42,556 37,425
Income tax payable 48,717 29,733 45,483 27,759
3,996,094 3,577,248 3,730,832 3,339,789
Non-current liabilities
Financial instruments liabilities 1,199,617 1,060,260 1,119,985 989,880
Advances received 433,732 723,155 404,941 675,152
Provisions 135,930 108,875 126,907 101,648
Guarantee deposits received 29,371 26,253 27,421 24,510
Defined benefit liabilities 167,186 128,546 156,089 120,013
1,965,836 2,047,089 1,835,343 1,911,203
Total liabilities 5,961,930 5,624,337 5,566,175 5,250,992
Equity attributable to owners
of the Parent Company
Capital stock 2,078,113 2,078,113 1,940,167 1,940,167
Capital surplus 548,200 548,200 511,810 511,810
Other components of equity (99,174) (99,174) (92,591) (92,591)
Accumulated other comprehensive income (57,897) 43,231 (54,054) 40,361
Retained earnings 926,428 790,075 864,931 737,630
Total equity 3,395,670 3,360,445 3,170,263 3,137,377
Total liabilities and equity 9,357,600 8,984,782 8,736,438 8,388,369 $W W $
(in millions of Korean won and thousands of US dollars)
SEPARATE STATEMENTS OFFINANCIAL POSITION
DECEMBER 31, 2012 AND 2011
SEPARATE STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2012 AND 2011
W $W $
DEC 31
2012
DEC 31
2011
DEC 31
2012
DEC 31
2011
Sales 8,180,269 7,031,864 7,637,260 6,565,086
Cost of sales 7,374,679 6,363,202 6,885,145 5,940,810
Gross profit 805,590 668,662 752,115 624,276
Selling and administrative expenses 440,374 357,604 411,142 333,866
Operating income 365,216 311,058 340,973 290,410
Other income 347,776 404,317 324,691 377,478
Other expenses 420,328 341,162 392,426 318,516
Financial income 41,662 63,213 38,896 59,017
Financial costs 118,776 177,213 110,892 165,449
Profit before income tax 215,550 260,213 201,242 242,940
Income tax expense 56,151 33,456 52,424 31,235
Profit for the year 159,399 226,757 148,818 211,705
Earnings per share attributable to the equity holders of the Companyduring the period
Basic earnings per share 388 552 0.36 0.52
Diluted earnings per share 387 551 0.36 0.51
(in millions of Korean won and thousands of US dollars, except per share amounts)
W $W $
W $W $
W $W $
18 19
DEC 31
2012
DEC 31
2011
DEC 31
2012
DEC 31
2011
Cash flows from operating activities
Cash generated from operations (1,127,581) (6,411) (1,052,732) (5,985)
Interest received 43,112 57,438 40,250 53,625
Interest paid (86,692) (125,672) (80,937) (117,330)
Income tax refund (paid) (48,104) 1,157 (44,911) 1,080
Dividends received 9,212 11,632 8,601 10,860
Net cash used in operating activities (1,210,053) (61,856) (1,129,729) (57,750)
Cash flows from investing activities
Decrease in current financial instrument assets 22,774 31,093 21,262 29,029
Increase in current financial instrument liabilities (derivatives)
87,216 15,047 81,427 14,048
Decrease in current other receivables 186,226 98,380 173,864 91,850
Disposal of assets held for sale 232,090 1,183,328 216,684 1,104,778
Decrease in investments securities 190,196 151,702 177,571 141,632
Decrease in investments in subsidiaries and associates 20,941 202 19,551 189
Decrease in non-current other receivables 88,429 160,330 82,559 149,687
Disposal of investment property - 12,009 - 11,212
Disposal of property, plant and equipment 994 3,100 928 2,894
Decrease in non-current financial instrument assets 162,541 - 151,751 -
Increase in current financial instrument assets (9,197) (25,322) (8,586) (23,641)
Decrease in current financial instrument liabilites (derivatives)
(277,289) (7,797) (258,882) (7,279)
Increase in current other receivables (164,911) (264,721) (153,965) (247,149)
Increase in investments securities (203,756) (84,647) (190,231) (79,028)
Increase in investments in subsidiaries and associates (8,157) (32,523) (7,616) (30,364)
Increase in non-current financial instrument assets - (42,257) - (39,452)
Increase in non-current other receivables (164,232) (157,031) (153,330) (146,606)
Acquisition of investment property - (1,265) - (1,181)
Acquisition of property, plant and equipment (35,253) (84,098) (32,913) (78,516)
Acquisition of intangible assets (13,467) (8,277) (12,573) (7,729)
Net cash provided by investing activities 115,145 947,253 107,501 884,374
Cash flows from financing activities
Increase in current financial instrument liabilities 1,570,000 1,299,359 1,465,783 1,213,107
Increase in non-current financial instrument liabilities 773,748 315,445 722,386 294,506
Decrease in current financial instrument liabilities (1,569,727) (2,175,247) (1,465,528) (2,030,853)
Decrease in non-current financial instrument liabilities - (139,981) - (130,689)
Others - (91) - (85)
Net cash provided by (used in) financing activities
774,021 (700,515) 722,641 (654,014)
Exchange loss on cash and cash equivalents (735) (19) (686) (18)
Net increase (decrease) in cash and cash equivalents (321,622) 184,863 (300,273) 172,592
Cash and cash equivalents at the beginning of year 645,194 460,331 602,366 429,774
Cash and cash equivalents at
the end of year
323,572 645,194 302,093 602,366
SEPARATE STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2012 AND 2011
W $W $
W $W $
(in millions of Korean won and thousands of US dollars)
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
DECEMBER 31, 2012 AND 2011
DEC 31
2012
DEC 31
2011
DEC 31
2012
DEC 31
2011
Assets
Current assets
Cash and cash equivalents 388,440 713,827 362,656 666,443
Financial instrument assets 37,015 42,767 34,558 39,928
Trade receivables 2,671,793 2,593,441 2,494,438 2,421,287
Other receivables 882,046 764,941 823,495 714,164
Advance payments 580,555 382,171 542,018 356,802
Prepaid expenses 335,766 354,697 313,478 331,152
Inventories 1,426,787 1,015,597 1,332,076 948,181
Assets held for sale 394,304 329,171 368,130 307,321
6,716,706 6,196,612 6,270,849 5,785,278
Non-current assets
Investments in associates 96,290 103,524 89,898 96,652
Financial instrument assets 2,051 164,875 1,915 153,930
Investments in securities 717,286 732,321 669,672 683,709
Other receivables 750,980 645,445 701,130 602,600
Prepaid expenses 31,335 41,089 29,254 38,361
Investment property 189,874 192,238 177,270 179,477
Property, plant and equipment 697,829 773,858 651,507 722,489
Intangible assets 113,627 105,101 106,084 98,124
Deferred income tax assets 543,341 513,516 507,274 479,429
3,142,613 3,271,967 2,934,004 3,054,771
Total assets 9,859,319 9,468,579 9,204,853 8,840,049 $W W $
(in millions of Korean won and thousands of US dollars)
W $W $
20 21CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
DECEMBER 31, 2012 AND 2011
DEC 31
2012
DEC 31
2011
DEC 31
2012
DEC 31
2011
Liabilities
Current liabilities
Financial instrument liabilities 1,380,132 955,585 1,288,518 892,153
Trade payables 467,643 687,978 436,601 642,310
Other payables 898,399 795,623 838,763 742,809
Advances received 1,175,821 1,056,548 1,097,770 986,414
Withholdings 129,783 109,637 121,167 102,358
Guarantee deposits received 45,591 39,710 42,565 37,074
Income tax payable 59,491 41,615 55,542 38,853
4,156,860 3,686,696 3,880,926 3,441,971
Non-current liabilities
Financial instruments liabilities 1,473,239 1,347,752 1,375,445 1,258,288
Other payables 5,451 5,584 5,089 5,213
Advances received 433,732 723,155 404,941 675,152
Provisions 144,370 117,323 134,787 109,535
Guarantee deposits received 48,266 45,158 45,062 42,160
Defined benefit liabilities 170,163 130,721 158,868 122,044
Deferred income tax liabilities 16,258 - 15,179 -
2,291,479 2,369,693 2,139,371 2,212,392
Total liabilities 6,448,339 6,056,389 6,020,297 5,654,363
Equity attributable to owners
of the Parent Company
Capital stock 2,078,113 2,078,113 1,940,167 1,940,167
Capital surplus 548,200 548,200 511,810 511,810
Other components of equity (99,203) (99,203) (92,618) (92,618)
Accumulated other comprehensive income (59,051) 84,611 (55,131) 78,994
Retained earnings 885,419 732,396 826,645 683,779
3,353,478 3,344,117 3,130,873 3,122,132
Non-controlling interest 57,502 68,073 53,683 63,554
Total equity 3,410,980 3,412,190 3,184,556 3,185,686
Total liabilities and equity 9,859,319 9,468,579 9,204,853 8,840,049
(in millions of Korean won and thousands of US dollars)
CONSOLIDATED STATEMENTS OF INCOMEYEARS ENDED DECEMBER 31, 2012 AND 2011
DEC 31
2012
DEC 31
2011
DEC 31
2012
DEC 31
2011
Sales 8,223,433 7,019,592 7,677,559 6,553,629
Cost of sales 7,403,857 6,336,765 6,912,386 5,916,128
Gross profit 819,576 682,827 765,173 637,501
Selling and administrative expenses 473,889 385,272 442,432 359,698
Operating income 345,687 297,555 322,741 277,803
Income from associates 234 2,413 218 2,253
Other income 344,037 395,408 321,200 369,161
Other expenses 367,923 351,510 343,500 328,177
Financial income 41,596 62,118 38,835 57,995
Financial costs 135,683 195,967 126,676 182,959
Profit before income tax 227,948 210,017 212,818 196,076
Income tax expense 54,919 36,463 51,273 34,043
Profit for the year 173,029 173,554 161,545 162,033
Profit (loss) for the period attributable to:
Equity holders of the Parent Company 176,902 177,074 165,159 165,320
Non-controlling interest (3,873) (3,520) (3,614) (3,287)
Earnings per share attributable to the equity holders of the Parent Company during the period
Basic earnings per share 431 431 0.40 0.40
Diluted earnings per share 430 430 0.40 0.40
(in millions of Korean won and thousands of US dollars, except per share amounts)
$W W $
W $W $
W $W $
W $W $
W $W $
22 23
DEC 31
2012
DEC 31
2011
DEC 31
2012
DEC 31
2011
Cash flows from operating activities
Cash generated from operations (1,034,731) (27,574) (966,045) (25,744)
Interest received 43,101 56,262 40,240 52,527
Interest paid (103,647) (144,426) (96,767) (134,839)
Income tax paid (56,542) (2,269) (52,789) (2,118)
Dividends received 9,011 11,633 8,413 10,861
Net cash used in operating activities (1,142,808) (106,374) (1,066,948) (99,313)
Cash flows from investing activities
Decrease in current financial instrument assets 22,774 33,202 21,262 30,998
Increase in current financial instrument liabilities (derivatives)
87,216 15,047 81,427 14,048
Decrease in current other receivables 186,225 98,449 173,863 91,914
Disposal of assets held for sale 228,142 1,183,328 212,998 1,104,778
Decrease in investments in securities 190,197 151,829 177,572 141,751
Disposal of investments in associates 7,149 202 6,674 189
Decrease in non-current finacial instrument assets 162,541 - 151,751 -
Decrease in non-current other receivables 88,428 163,869 82,558 152,991
Disposal of investment property - 12,009 - 11,212
Disposal of property, plant and equipment 7,058 3,765 6,589 3,515
Net cashflow by acqusition of subsidiaries - 14,042 - 13,110
Increase in current financial instrument assets (23,797) (26,792) (22,217) (25,014)
Decrease in current financial instrument liabilities (derivatives)
(277,289) (7,797) (258,882) (7,279)
Increase in current other receivables (162,831) (264,721) (152,022) (247,149)
Acquisition of investments in securities (203,821) (84,739) (190,291) (79,114)
Acquisition of investments in associates (4,946) (2,754) (4,618) (2,571)
Increase in non-current financial instrument assets - (42,457) - (39,639)
Increase in non-current other receivables (164,231) (157,031) (153,329) (146,607)
Acquisition of investment property - (1,265) - (1,181)
Acquisition of property, plant and equipment (62,725) (99,481) (58,561) (92,877)
Acquisition of intangible assets (13,527) (9,117) (12,629) (8,512)
Net cash provided by investing activities 66,563 979,588 62,145 914,563
Cash flows from financing activities
Increase in current financial instrument liabilities 1,585,230 1,355,935 1,480,002 1,265,928
Increase in non-current financial instrument liabilities 762,101 574,092 711,512 535,984
Decrease in current financial instrument liabilities (1,595,738) (2,231,741) (1,489,812) (2,083,597)
Decrease in non-current financial instrument liabilities - (339,702) - (317,152)
Others - (91) - -
Net cash provided by (used in) financing activities
751,593 (641,507) 701,702 (598,837)
Exchange loss on cash and cash equivalents (735) (19) (686) (18)
Net increase (decrease) in cash and cash equivalents (325,387) 231,688 (303,787) 216,395
Cash and cash equivalents at the beginning of year 713,827 482,139 666,443 450,048
Cash and cash equivalents at
the end of year
388,440 713,827 362,656 666,443
CONSOLIDATED STATEMENTS OF CASH FLOWSYEARS ENDED DECEMBER 31, 2012 AND 2011
(in millions of Korean won and thousands of US dollars)
W $W $
W $W $