HYUNDAI Heavy Industries Co, the world's largest ship builder, plans to deliver 25 percent more vessels this year as it increases production to work through almost four years' worth of orders.

It delivered 11 vessels to carry consumer goods and fuel in January, the most in a month in the industry, the Ulsan, South Korea-based company said in an emailed statement received by Bloomberg News yesterday.

The ships were all delivered by as much as 2 1/2 earlier than originally scheduled, Hyundai Heavy said.

Ship yards in South Korea, the world's largest ship-building nation, are increasing capacity after they won almost half of the US$187.4 billion ship owners spent on new vessels last year. Hyundai Heavy is building two new docks and extending the length of existing ones to meet demand.

"Increased capacity means more earnings growth for shipyards in this and the coming years,'' said Kang Young Il, an analyst at Korea Investment & Securities Co in Seoul. He has a "buy'' recommendation for Hyundai Heavy.

The company delivered six large-sized container vessels, two LNG carriers, two oil tankers and one liquefied petroleum gas ship in January.

Hyundai Heavy delivered a total of 81 vessels valued at US$6.85 billion last year, compared with 73 worth US$4.81 billion in 2006. Of the total, 46 were container ships, 16 oil tankers and 10 LNG carriers.

Hyundai Heavy reported a record 1.22 trillion won (US$1.3 billion) in net income in the first nine months of last year, more than tripling from a year earlier. Sales increased 26 percent to a record high of 11.3 trillion won.

The ship yard may report a net income of 2.31 trillion won this year, 39 percent more than an estimated profit of 1.66 trillion won in 2007. It has yet to report last year's earnings.

One of Hyundai Heavy's new docks in South Korea will be among the largest in the world. The company has an order backlog of about 330 vessels, or 28.3 million gross tons.

The ship yard plans to invest 1.64 trillion won for its expansion this year, 41 percent more than what it spent in 2007.

Hyundai Heavy shares dropped 5.5 percent, the biggest decline in a week, to 338,500 won as of 12:44pm in Seoul yesterday.

The stock fell over concerns an American recession may lead ship owners to order fewer vessels.