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Hyundai Heavy Industries2Q 2010 Earnings Release

July 21, 2010

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�Important Notice

The information contained in this presentation has not been reviewed by outside auditors. It is presented here

unaudited in the interest of timely disclosure solely for the convenience of our investors, and is subject to change as

a result of the auditing process.

Also this presentation contains Business Plan which was formed based on the company’s estimation and

therefore, the actual results may vary depending on both the domestic and global business environment.

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ROE / ROA

Financial Highlights

Sales (in KRW billions) Operating Income/Margin (in KRW billions)

Debt-to-Equity / Liability-to-Equity ratio

5.2%9.9%9.1%10.4%10.6%9.5%

354.0%

123.5%

136.7%153.6%

270.6%

205.6%

0%

20%

40%

60%

80%

100%

09. 1Q 09. 2Q 09. 3Q09. 4Q 10.1Q 10.2Q

0%

100%

200%

300%

400%

500%Debt-to Equity(Left)

Liabilities-to-Equity(Right)

12.2%

31.5%27.9%

35.8%39.8%

45.6%

34.0%

10.0%8.6%9.5%9.3%10.4%

0%

10%

20%

30%

40%

50%

09. 1Q 09. 2Q 09. 3Q 09. 4Q 10. 1Q 10.2Q

ROE ROA

• Net Income = the sum of the previous four quarters• Equity & Assets = average of the current and four quarters prior

5,493.6 5,331.04,985.9

5,331.7 5,335.25,306.4

0

1,000

2,000

3,000

4,000

5,000

6,000

09. 1Q 09. 2Q 09.3Q 09.4Q 10.1Q 10.2Q

770.7

534.7471.4

531.7

880.9

674.8

14.4%

16.6%

8.6%

12.7%

10.7%10.0%

0

500

1,000

09. 1Q 09. 2Q 09.3Q 09.4Q 10. 1Q 10.2Q

0%

10%

20%

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Profit & LossProfit & Loss

(in KRW billions)

1Q 2010 2Q 2009

QoQ YoY

5,335.2 0.5% 0.1% 5,306.4 5,331.0

4,221.9 1.5% -7.8% 4,159.8 4,581.3

1,113.3 -2.9% 48.5% 1,146.6 749.7

770.7 -12.5% 44.1% 880.9 534.7

14.4% -2.2%p 4.4%p 16.6% 10.0%

403.8 30.9% - 308.5 (63.6)

Net Interest Income 37.8 12.5% 63.6% 33.6 23.1Net Gain on Equity-Method Investments

295.5 11.6% 1307.1% 264.9 21.0

1,174.5 -1.3% 149.3% 1,189.4 471.1

910.5 -1.7% 131.7% 926.2 393.0

17.1% -0.4%p 9.7%p 17.5% 7.4%

Gross Profit

Cost of Sales

2Q 2010

Sales

Net Income Margin

Net Income

Operating Income

Net non-operating Income

Net Income before Income Tax

Operating Income Margin

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Sales by DivisionSales by Division

(in KRW billions)

1Q 2010 2Q 2009

QoQ YoY

Shipbuilding 1,882.1 -2.9% -17.3% 1,937.6 2,276.5

Offshore &Engineering 815.6 24.7% -5.6% 654.1 863.9

Industrial Plant &Engineering 507.3 -34.9% 20.7% 779.0 420.4

Engine & Machinery 655.9 9.8% -14.0% 597.5 762.5

Electro ElectricSystems 801.5 3.7% 20.2% 773.2 666.6

ConstructionEquipment 637.1 19.6% 108.6% 532.9 305.4

Others 35.7 11.2% 0.0% 32.1 35.7

Total 5,335.2 0.5% 0.1% 5,306.4 5,331.0

2Q 2010

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Sales AnalysisSales Analysis

���� Recorded KRW 5,335.2 bil. in 2Q 2010 (Increased by 0.5% QoQ, 0.1%YoY)

Sales Breakdown

- QoQ : Increased slightly due to sales increase in non-shipbuilding divisions including Offshore and Construction Equipment

- YoY : Increased slightly due to the sales increase in non-shipbuilding divisions despite a appreciation of Korean Won and work

volume decline in Shipbuilding and Engine divisions

57%

24%

13%

6%

48%

27%

15%

10%

48%

25%

15%

12%

09. 2Q 10. 1Q 10. 2Q

OthersConstruction EquipmentElectro Electric SystemsOffshore&Engineering/Industrial PlantShipbuilding/Engine&Machinery

� Sales analysis QoQ

- Shipbuilding/Engine : Shipbuilding decreased due to the work volume decline,

Engine increased due to the sales increase in marine engine

- Offshore/Industrial Plant : Offshore increased due to the newly started projects,

Industrial Plant decreased compared to the previous quarter

which showed a sharp sales increase due to the input of main

equipments

- Electro Electric Systems : Increased due to the demand increase for solar power modules

- Construction Equipment : Increased due to the sales recovery in China

� Sales analysis YoY

Overall sales increased slightly despite the appreciation of the Korean Won and the work volume decline in the Shipbuilding and the Engine divisions while strong sales performances were seen in the non-shipbuilding divisions especially in theIndustrial Plant, Electro Electric Systems, and Construction Equipment Divisions

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Operating Income Analysis Operating Income Analysis

Operating Income(in KRW billions)

���� Recorded KRW 770.7 bil. in 1Q 2010 (Decreased by 12.5% QoQ and increased 44.1% YoY)

� Operating profit margin analysis QoQ

-Shipbuilding : Decreased due to the higher steel plate prices and

indirect cost increase by the work volume decline

-Engine & Machinery : Increased by benefiting from margin improvement in marine engine

-Offshore /Industrial Plat : Offshore increased due to the margin improvement in major projects

Industrial Plant declined due to the delay of an overseas project

-Electro Electric Systems : Decreased due to the overseas demand decline for power equipments

-Construction Equipment : Increased due to the sales recovery in China

� Operating profit margin analysis YoY

-Shipbuilding : Increased due to the greater contribution of higher-priced

vessels and lower steel plate prices

-Engine & Machinery : Decreased slightly due to the sales decline in power plant engines

-Offshore/Industrial Plant : Offshore increased due to the addition of highly profitable projects

Industrial Plant decreased due to the delay of an overseas project

-Electro Electric Systems : Decreased slightly due to depreciation of the US dollars

-Construction Equipment : Increased due to the sales recovery in China

- QoQ : Decreased due to margin decline in Shipbuilding and industrial Plant Divisions

- YoY : Increased due to margin improvement in Shipbuilding and Construction Equipment Divisions

770.7

880.9

534.7

14.4%

16.6%

10.0%

0

500

1,000

09. 2Q 10.1Q 10.2Q

0%

5%

10%

15%

20%OP Margin

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2Q 2010 1Q 2010 2Q 2009

Interest income 37.8 33.6 23.1Foreign currency

transaction/translation 138.4 -129.5 -91.7

Equity method investments 295.5 264.9 21.0Foreign exchange forward

contracts -62.8 -18.2 -59.3

Others -5.1 157.7 43.3

Total 403.8 308.5 -63.6

[Gain/loss on valuation of equity method investments]

(in KRW billions)

2Q 2010 1Q 2010 2Q 2009

Hyundai Samho Heavy 212.8 170.3 9.5Hyundai Oilbank 6.5 59.8 17.4Hyundai Merchant

Marine33.0 -21.0 -49.8

Others 43.2 55.8 43.9

Total 295.5 264.9 21.0

[Net Non-operating income/loss]

(in KRW billions)

Net Income AnalysisNet Income Analysis

Quarterly Net Income (in KRW billions)

���� Recorded KRW 910.5 bil. in 2Q 2010 (Decreased by 1.7% QoQ and increased 131.7% YoY)

393.0

926.2 910.5

17.1%17.5%

7.4%

0

500

1,000

09. 2Q 10.1Q 10.2Q

0%

5%

10%

15%

20%

NP Margin

- QoQ : Decreased slightly due to the decline in operating profit

- YoY : Increased by 131.7% due to improvement in non-operating income including equity method investment and

foreign currency transaction/transaction

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Capital Structure (Summary)Capital Structure (Summary)

* Cash: Cash and cash equivalents + short-term financial instruments + short-term investment securities

(in KRW billions)

As of Jun. 31 2010 As of Dec. 31 2009

Total Assets 25,477.8 24,872.6 605.2 2.4%

Current Assets 10,898.7 10,609.9 288.8 2.7%

* Cash 711.4 741.6 (30.2) -4.1%

Non-Current Assets 14,579.1 14,262.7 316.4 2.2%

Total Liabilities 14,078.8 15,064.2 (985.4) -6.5%

Current Liabilities 12,145.1 12,909.1 (764.0) -5.9%

Long-term Liabilities 1,933.7 2,155.1 (221.4) -10.3%

Shareholders' Equity 11,399.0 9,808.4 1,590.6 16.2%

Liabilities-to-Equity Ratio 123.5% 153.6% -30.1%p -

Debt-to-Equity Ratio 5.2% 9.1% -3.9%p -

Total borrowings 596.1 889.6 (293.5) -33.0%

Change

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Capital Structure Capital Structure

(in KRW billions)

25,477.8 24,872.6 605.2Current Assets 10,898.7 10,609.9 288.8

Cash & Cash equivalents 604.6 632.6 (28.0)

Short-term financial instruments 106.8 109.0 (2.2)

Short-term investment securities 0.0 0.0 0.0

Trade accounts & notes receivable 5,673.5 4,973.5 700.0

Firm commitment assets 1,226.1 1,166.8 59.3

Inventories 1,618.4 1,928.6 (310.2)

Non-current Assets 14,579.1 14,262.7 316.4

Investment securities 5,442.7 4,866.4 576.3

Tangible assets 8,086.0 8,145.5 (59.5)

Intangible assets 295.1 288.5 6.6

Firm commitment assets 435.4 755.5 (320.1)

Liabilities 14,078.8 15,064.2 (985.4)Current Liabilities 12,145.1 12,909.1 (764.0)

Trade accounts & notes payable 1,520.1 1,427.6 92.5

Short-term Borrowings 291.7 585.3 (293.6)

Advances from customers 7,483.3 8,583.5 (1,100.2)

Foreign exchange forward contracts 1,380.2 1,264.0 116.2

Non-current Liabilities 1,933.7 2,155.1 (221.4)

Corporate bonds 299.3 299.1 0.2

Foreign exchange forward contracts 515.5 862.6 (347.1)

Shareholders' Equity 11,399.0 9,808.4 1,590.6Capital Stock 380.0 380.0 0.0Capital Surplus 2,869.6 2,869.6 0.0Capital adjustments (1,697.8) (1,697.8) 0.0Accumulated other comprehensive income 1,718.7 1,752.7 (34.0)Retained Earnings 8,128.5 6,503.9 1,624.6

Dec. 31 2009(B)

Change(A-B)

Assets

Jun. 31 2010(A)

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New Orders New Orders

���� Increased by 197.8% YoY by robust orders in non-shipbuilding sector followed by a favorable market condition

Annual

Target1H

Achieve

mentYoY 1H

Shipbuilding 4,030 1,644 40.8% 41000.0% 4

Offshore&

Engineering4,200 2,659 63.3% 1385.5% 179

Industrial Plant&

Engineering2,000 1,825 91.3% 725.8% 221

Engine&

Machinery2,300 851 37.0% -6.2% 907

Electro Electric

Systems3,636 1,980 54.5% 27.8% 1,549

Construction

Equipment1,559 1,028 65.9% 108.1% 494

Total 17,725 9,987 56.3% 197.8% 3,354

2010 2009

(in USD millions)

New Orders (in USD millions)

400

1,549

494

4,484

1980

1028911

2,495

0

1,000

2,000

3,000

4,000

5,000

Shipbuilding/Engine Offshore/Industrial Plant Electro Electric Systems Construction Equipment

2009. 1H

2010. 1H

* Major projects received in 1H

- Offshore : Feb. – Myanmar SHWE Field Development Project, $1.4 bil / Goliat FPSO, $1.1 bil.

- Industrial Plant : Jun. – Riyadh Power Plant

-Shipbuilding : Received 30 vessels worth of USD 1.64 bil. on the back of the improved shipbuilding market situationcompared to the previous year(21 Bulk Carriers, four Tankers, Two PCTCs, Two LPGs, one Product Carrier)

- Non-Shipbuilding : Increased by 149% YoY based on the strong demand growth in the Offshore, Industrial Plant and Electro electricSystems and Construction Equipment divisions

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Thank you !Thank you !http://http://www.hhiir.comwww.hhiir.com

HHI Seoul Office. IR Team

E-mail: hhiir@hhi.co.kr

Tel. 02-746-4603,4565,4633,4775,4728

Website: www.hhi.co.kr (Company) / www.hhiir.com (IR)