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To: Don Green who wrote (65689)	2/9/2001 8:21:26 PM
From: Don Green	Respond to of 93625

How can Hyundai Electronics lose $1.9 billion on 48% growth in sales? South Korea's debt-ridden Hyundai Electronics seems be digging its hole even deeper. The world's second largest memory chip maker this week reported a deepening loss of 2.4 trillion won ($1.91 billion) for 2000. And that happened even though its sales soared 48%. "Hyundai's earnings last year were worse than we expected," said Lee Chang-kyung, analyst at Shinhan Securities. Hyundai blamed its problems on investment losses, the disposal of unprofitable assets, and rising exchange rates. It listed a 236 billion won loss on investments, a 325 billion won loss on the disposal of inventory, a 161-billion-won loss from disposing of unprofitable assets and foreign exchange losses of 385 billion won. Faced with mountains of debt--more than $4.2 billion (5.3 trillion won) by some accounts--Hyundai Electronics has begun to sell billions of dollars in corporate bonds to the Korean government to ease its cash flow. The chip maker said in January that it would be able to repay 5.3 trillion won in maturing debt and loans this year by selling assets and paring a quarter of its workforce. But low prices on DRAMs continue to plague the chip company. "We expect Hyundai to record about 500 billion of net loss this year on sales of about 8 trillion won, as DRAM prices will fall further till the second quarter," HSBC Securities analyst Han Soong-ho told Reuters. "Hyundai should reduce its debt first through the sale of its semicon business or equity financing," Han said, noting the company's acquisition of LG Semicon in 1999 had increased its production capacity and its debt. Semiconductor sales accounted for 78% of Hyundai Electronics' revenue last year, with DRAMs accounting for 80% of its total semiconductor sales. siliconstrategies.com