Daewoo Construction Shows Clear Improvement in Performance

[Asia Economy Reporter Park Soyeon] Daewoo E&C is improving its performance and financial structure while expanding investments in the renewable energy sector.

Daewoo E&C recorded an operating profit of 112.3 billion KRW and sales of 2.1001 trillion KRW in the third quarter of this year. These figures represent increases of 9.1% and 10.7%, respectively, compared to the same period last year. Net profit rose by 59.6% to 89.4 billion KRW. Cumulative sales and operating profit up to the third quarter reached 6.2465 trillion KRW and 534 billion KRW, marking increases of 6.9% and 75.1% compared to the same period last year.

New orders totaled 7.6316 trillion KRW through the third quarter, achieving 68.1% of the annual target of 11.2 trillion KRW. Daewoo E&C holds a total order backlog of 40.534 trillion KRW, up 6.4% from the end of last year, securing approximately 4.9 years’ worth of work relative to annual sales.

Daewoo E&C expects continued performance improvement in the fourth quarter as it plans to sell 15,000 housing units domestically, and high-profit project sales from the Vietnam THT corporation and the Iraq site begin in earnest.

A Daewoo E&C official explained, "In the housing sector, continuous investment in internal systems such as the integrated real estate information system and the 4D smart modeling program ‘SM.ile’ has led to an analysis system covering the entire process from planning, order acquisition, construction, to operation and management, which has contributed to the expansion of orders."

Improvements in the financial structure are also observed. The debt ratio has decreased by 67 percentage points from the peak of 290% at the end of 2019 to 223% as of the third quarter this year. The proportion of long-term borrowings is stable at 67%, establishing a stable capital inflow structure. The net borrowing ratio has also significantly decreased, dropping from 44% at the end of last year to 19% as of the third quarter this year, more than halving.

Investment to accelerate a carbon-zero society, a global ESG management trend this year, has also expanded. The Sihwa Tidal Power Plant, the world’s largest tidal power facility, can produce up to 254,000 kW of electricity at once, which is 14,000 kW more than the French Lens power plant. In addition, Daewoo E&C continues to invest and participate in renewable energy sectors such as solar and wind power, building up technology and construction experience.

Uncertainty surrounding the merger and acquisition (M&A) process with the Jungheung Group is considered resolved. Jungheung Group has publicly stated that it will manage Daewoo E&C as a separate company without considering a merger or brand integration. It is expected to establish a structure where separate companies operate in the same industry, similar to Hyundai and Kia Motors.

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