Doosan Construction Q1 Operating Profit 16.9 Billion Won... Interest Coverage Ratio Highest in 10 Years

[Asia Economy Reporter Onyu Lim] Doosan Construction announced on the 14th that it recorded sales of 289.6 billion KRW and an operating profit of 16.9 billion KRW in the first quarter. The interest coverage ratio reached 2.07 times, the highest level in the past 10 years.

The company explained that the main factors for the improved performance were the increase in operating profit margin due to securing high-quality projects and the reduction in financial costs resulting from financial improvement efforts pursued over the past decade. A Doosan Construction official said, "The effects of restructuring and financial improvement efforts carried out over the past several years are now fully emerging."

Net borrowings, which were around 1.7 trillion KRW in 2010, have been drastically reduced to 82.5 billion KRW in the first quarter, about one-twentieth of the previous level. As a result of decreased interest expenses and improved operating profit, the net profit for the first quarter also successfully turned positive.

The company's financial structure improvement is having a positive effect on securing urban maintenance projects. Since the beginning of the year, projects such as the Gwangmyeong Soha 4 District Street Housing Maintenance Project in Gyeonggi Province, Incheon Sambu Apartment Reconstruction, Masan Hapjeong-dong 2 District Redevelopment, and Sangok 3 District Redevelopment have been won, successfully reversing the atmosphere.

Along with financial improvement, the company is also performing well in various business sectors. The construction division is expected to supply about 11,000 housing units in the metropolitan area and provinces this year. In the metropolitan area, it plans to sell 5 to 6 projects including Yeongdeungpo and Eunpyeong-gu in Seoul, Songnim-dong in Incheon, and Yeoui Station area.

In the provinces, sales are underway in Samcheok Jeongsang, Gimhae Yulha, and Yangsan Seokgye. Especially in the Busan and Gyeongnam regions, the company continues its success by promoting the premium Zenith brand. Over the past two years, it has supplied more than 10,000 Zenith apartments in the Busan and Gyeongnam areas.

Starting with the sale of 2,385 units of Doosan We've the Zenith Harbor City in Beomil-dong, Busan in 2019, the company successfully completed the sale of Central Saha (1,643 units) last year. This year, it is selling ‘Gimhae Yulha The Sky City’ (4,393 units) and ‘Doosan We've the Zenith Yangsan’ (1,368 units).

Doosan Construction’s civil engineering division ranked in the top 5 in public market orders in the first quarter. It secured orders including the ‘Highway No. 50 Yeongdong Line Ansan~Buksuwon Section Expansion Construction Section 1 (109.8 billion KRW)’ commissioned by Korea Expressway Corporation, ‘Pyeongtaek Area Electric Supply Facility Power Duct Construction,’ and ‘National Supported Local Road No. 60,’ recording 156 billion KRW in orders and ranking 4th in the first quarter.

Having established a strong image in the civil engineering market with projects like the Shinbundang Line and Gangnam Circular Road, Doosan Construction is again attracting attention in the private investment project sector. The Western Light Rail Transit project (Saejeol Station to Seoul National University Station), first proposed by Doosan Construction in 2017, passed eligibility in June last year and PQ screening in March this year, and is currently in the second final proposal stage, making winning the bid highly likely.

Doosan Construction stated, "We will continue to do our best to strengthen our financial health while focusing our capabilities on securing high-quality projects and improving cost ratios for sustainable growth."

This content was produced with the assistance of AI translation services.