Hyundai Motor Spurts Ahead

Kia’s Forte Koup

New Models, Improved Reputation Boost Carmaker

By Jane Han
Staff Reporter

What a year for Hyundai Motor.

Launching upgraded models and opening new plants in emerging markets amid the global recession were no easy achievements, but the South Korean auto giant marched right through and rolled out record results.

Hyundai built up its momentum from the start of the year to eventually hit record quarterly profits.

In the third quarter, the world's No. 4 automaker, combined with its affiliate, Kia, posted a record quarterly net profit of 979.1 billion won, up 270 percent from a year earlier.

In the April-to-June period, it earned 811.9 billion won, which was also a strong gain from the previous year.

The better-than-expected results were racked up at a time when the world's top car makers were sinking in the industry's worst-ever downturn. So what was behind the earnings surprise?

Stimulus measures put out by governments around the world boosted demand and the weak currency helped lift sales. But besides these factors, analysts say Hyundai's cheap and fuel-efficient vehicles and lineup of new models largely helped win over consumers who were skittish to spend.

``Hyundai got a nice lift from its new models this year,'' said Sohn Myoung-woo, an analyst at Woori Investment & Securities, adding that the company's strong performance is likely to continue through the fourth quarter.

There are concerns that the Korean firm will see weaker results at the end of this year as the local currency strengthens and governments around the world phase out measures to boost auto demand, says Ko Tae-bong, analyst at IBK Securities.

But he said Hyundai will post higher quarterly results in the October-to-December period with a more diversified sales mix.

LG Maintains Upward Growth Trajectory

LG Electronics continues to build up its brand in key global markets, relying on sleek and sophisticated products such as smart phones, left, and light-emitting diode (LED) backlit liquid-crystal display (LCD) televisions. / Korea Times

By Kim Tong-hyung
Staff Reporter

LG Electronics doesn't intend to be in second place forever behind its bitter industry rival Samsung Electronics. And the domestic battle has grown into a global one in recent years, with the two Korean high-tech juggernauts emerging as world beaters at the expense of competitors from Japan, Europe and North America.

Obviously, Samsung clearly has the upper hand in the Korean business sector's fiercest rivalry, as it is now the world's largest maker of consumer electronics products and memory chips.

However, LG is now starting to give Samsung Electronics a run for its money, gaining ground in the two areas Samsung calls its major markets ― flat-screen televisions and mobile phones.

LG recently edged Sony to trail Samsung as the second-largest maker of liquid-crystal display (LCD) televisions. The company is also the world's No. 3 handset vendor behind Nokia and Samsung, passing companies like Sony Ericsson and Motorola.

LG officials believe that 2010 will provide a truer test of the company's mettle, with Samsung eager to cement its leadership, and other global electronics giants such as Sony, Sharp and Motorola looking to put up a stronger fight to regain their lost market share during the recession.

However, LG seems confident of meeting the challenge head-on, inspired by a robust third-quarter driven by brisk sales of flat-screen televisions and mobile phones.

LG, which currently trails Samsung as the No. 2 liquid-crystal display (LCD) television maker, posted a sharp increase in net income and operating profit during the July-September period and expects its momentum to carry on to the holiday season.

The third-quarter net income of 807.2 billion won was more than a 30-fold increase from the 24.9 billion won during the same period last year, while global revenue rose to 13.9 trillion won, compared to the 12.1 trillion won a year earlier.

LG's third-quarter operating profit rose to 850.2 billion won from 570.5 billion won during the same period last year.

There are worries that LG will post more modest numbers in the fourth-quarter, with the price erosion in the television and mobile phones business and also an expected increase in marketing expenses resulting in lower profitability.

Broadband, IPTV put SKB back on track

SK Broadband, the fixed-line unit of SK Telecom, is garnering positive reviews among customers for its new telephone and broadband Internet brand, “B,” launched in April. / Korea Times file

By Kim Tong-hyung
Staff reporter

The past few years have been tough for SK Broadband, formerly Hanaro Telecom, which has struggled to compete with industry giant KT in fixed-line telephony and broadband Internet services in a quickly-saturating domestic market.

However, the company finally appears to be nearing the end of the tunnel, as it has acquired a growing number of customers for new ``convergence'' services like Internet telephony and Internet protocol television (IPTV).

These products are becoming a crucial part of SK Broadband's discount packages that offer fixed-line, wireless, broadband and Web-enabled television under a single bill, allowing them to win over customers in markets where KT reigns.

SK Broadband, the fixed-line unit of mobile telephony king, SK Teleocm, reported a loss of 44.3 billion won (about $39 million) during the first quarter on revenue of 493 billion won, which was a 12.5 percent increase year-on-year. But industry watchers believe the company will likely turn back to black during the second-half of the year.

Such optimism is supported by SK Broadband's continuously expanding customer pool, as the company continues to strengthen its position in its main markets and gain traction for new services. The company is targeting 600 billion won in revenue for 2010, which would represent a 15 percent annual increase.

``Our goal is to deliver valuable services to our customers and build on a foundation for sustainable growth. We will also strengthen our alliance with SK Telecom and achieve enhanced competitiveness both in fixed-line and mobile businesses,'' said Kim Young-chul, SK Broadband's chief financial officer (CFO).

``We believe the company will really be firing on all cylinders next year, when our strengthened customer pool for broadband Internet, IPTV and Internet telephony improves our profit structure.''

SK Broadband is gaining a healthy influx of subscribers for its telephone services, adding more than 292,000 users to its customer pool during the first quarter alone. The company also gained 32,000 customers for its premium broadband services, which provides Internet speeds of 100 megabits per second (Mbps) or faster, during the first three months of the year, pushing up the total number of customers to 3.15 million.

STX in Ghana: STX Group Chairman Kang Duk-soo, left, and Ghanaian Vice President John Dramani Mahama hold an artist's concept on the infrastructure construction plan at the Ghanaian presidential office in Accra. The meeting was held last week. STX will build 200,000 homes and other infrastructure in the African country.

/ Courtesy of STX Group

Top money-spinner: Kang Shin-woo, center, senior executive vice president of Korea Investment Trust Management, poses with officials of Asian Investor during an award ceremony held in Hong Kong, Sunday, after the investors’ magazine picked his firm as the best on-shore fund house in South Korea.

/ Courtesy of Korea Investment Trust Management

Seoul halts trade, shuts sea lanes to NK

President Lee Myung-bak delivers an address to the nation regarding the March 26 sinking of the Navy vessel Cheonan, at the War Memorial in Seoul, Monday. / Korea Times photo by Wang Tae-seog



Lee vows firm response to military provocation



By Na Jeong-ju

Staff reporter



President Lee Myung-bak warned North Korea, Monday, of potential armed retaliation against any provocative acts in the future, saying South Korea will immediately exercise its right of self-defense if its land, territorial waters and airspace are violated by the communist country again.



He also pledged to take the North's torpedo attack against the Navy vessel Cheonan on March 26 to the U.N. Security Council (UNSC) for an international response to the act of aggression.



As part of its own countermeasures, South Korea has banned North Korean ships from using any sea routes under its control and suspended all inter-Korean trade and exchange except for aid programs for infants and children, and the joint industrial complex in the North's city of Gaeseong.



"From now on, we won't tolerate any provocative acts by North Korea," Lee said in a nationally televised address to the nation at the War Memorial in Seoul, which commemorates the 1950-53 Korean War.



"If our territorial waters, airspace and land are violated again, we will immediately exercise our right of self-defense."



He vowed to refer the issue to the UNSC to have the North pay the price for its actions, while strengthening combat readiness based on the strong alliance with the United States.



"The attack on the Cheonan violated the Charter of the United Nations and the existing agreements the two Koreas had reached for the sake of peace and stability, including the Korean War Armistice Agreement and the Basic Agreement between South and North Korea," Lee said.



The conservative leader also urged North Korea to apologize for the ship sinking, which claimed the lives of 46 sailors, and to punish those who were behind the attack.



He stopped short of mentioning North Korean leader Kim Jong-il, but said, as a compatriot, he was ashamed of what North Korea was doing.



"What is the situation in North Korea? Nothing has changed over the last 60 years," Lee said. "It is a country still holding on to an empty ambition of forcefully reuniting the Korean Peninsula under the banner of communism. It is a country that still believes in making threats and committing terrorist activities.



"North Korea's goal is to instigate division and conflict," he charged.



The address came days after an international team of investigators concluded a North Korean torpedo destroyed the 1,200-ton Cheonan near the West Sea border. The ship was conducting a routine patrol mission, according to the South Korean military.



Regarding claims about the poor initial response to the disaster, Lee admitted that the military had failed somewhat and vowed its reform.



"We have to admit that our Armed Forces made mistakes," he said. "As follow-up measures, we will reestablish the discipline of the Armed Forces, rectify the military and reinforce our combat capabilities. Joint Korea-U.S. defense readiness will be further strengthened as well."