[Let's Run Again, Construction Korea] Doosan Construction's Grand 'Revival' with a New Owner and Strong Capital, Securing Large-Scale Orders

Three Consecutive Quarters of Profit Last Year

Improved Financial Structure, Boost in Urban Renewal Orders

Total Order Volume Exceeds 2.3 Trillion KRW

Q Capital Acquires Management Rights... Secures Funds with 250 Billion KRW Capital Increase

[Asia Economy Reporter Kim Min-young] Doosan Construction, which faced a liquidity crisis due to a large-scale unsold inventory after the financial crisis, is making a spectacular comeback. Up to the third quarter of last year, the company achieved operating profit and net profit, regaining stability both internally and externally. In particular, with Q Capital acquiring management rights at the end of last year, new available funds were secured, enabling reinvestment in the housing business as well as efforts to improve profitability.

◆ Revival of a Prestigious Company, Three Consecutive Quarters of Profit = Doosan Construction recorded an operating profit of 16.9 billion KRW in the first quarter of last year, followed by 24.1 billion KRW in the second quarter and 13.3 billion KRW in the third quarter, continuing a three-quarter streak of profitability. The net profit for last year also reached 7.6 billion KRW cumulatively by the third quarter, achieving three consecutive quarters of net profit. The cumulative interest coverage ratio stood at 2.6 times, the highest level in the past decade.

Doosan Construction’s return to profitability was mainly driven by a significant reduction in borrowings, which lowered financial costs. Total borrowings of approximately 2.4 trillion KRW and net borrowings of around 1.7 trillion KRW in 2010 were drastically reduced to 210 billion KRW and 100 billion KRW respectively by the end of the third quarter last year. A Doosan Construction official explained, "Selective project orders considering cost rates and sales feasibility, which increased operating profit margins, were also a major factor in performance improvement."

As the company’s financial structure improved, orders for urban renewal projects gained momentum. Doosan Construction consecutively secured major projects such as the Masanhapseong 2 District Housing Redevelopment Project in Gyeongnam, Wonju Wondong Namsan Housing Redevelopment Project in Gangwon, and Songjeong Rental Housing in Geoje, Gyeongnam. The cumulative contract amount for last year reached an estimated 1.82 trillion KRW. Including projects with preliminary contracts and completed contractor selections, the total order volume amounts to 2.3097 trillion KRW.

Doosan Construction supplied about 10,000 housing units last year. In the first half, approximately 6,500 units were supplied in Gimhae Yulha, Samcheok Jeongsang, and Yangsan Seokgye, and in the second half, about 3,200 units were additionally supplied in the metropolitan area and other regions. This year, about 20,000 units are planned for supply. Starting with Doosan We’ve Gwangju Central Park in Gwangju, Gyeonggi Province in January, around ten projects including the Yeongdeungpo 13 District Urban Environment Renewal Project are scheduled for supply.

Incheon Fuel Cell Completion Photo. (Source: Doosan Construction)

◆ Establishing a Strong Position in the Civil Engineering Market = Doosan Construction is also performing well in the public sector bidding competition related to civil engineering. In the comprehensive evaluation bidding projects, the company secured contracts including the expansion work of Section 1 of the Ansan to North Suwon segment on Expressway No. 50 Yeongdong Line commissioned by Korea Expressway Corporation, National Support Local Road No. 60, power duct construction in the Pyeongtaek area, and power duct construction in the Suwon-Hwaseong area. By the end of the third quarter last year, the order amount for comprehensive evaluation projects was 180.3 billion KRW, ranking second in the industry.

Doosan Construction has also established itself as a strong player in the technical bidding sector for civil engineering. As a joint contractor, it signed a priority construction contract for Section 2 of the Seoul Metropolitan Subway Line 9 Phase 4 Extension Project (turnkey) and is currently under construction. It was selected as the qualified bidder for detailed design for the Gangneung to Jejin single-track railway Section 2 construction project (turnkey) and the Busan New Port North Container Phase 2 Port Hinterland Development Project (turnkey), with construction contracts expected to be signed soon. With approximately 130 billion KRW in orders secured in the technical bidding sector, the company ranks fourth in the industry.

The private investment sector is also regaining momentum. The Western Light Rail Project (Saejeol Station to Seoul National University Station), first proposed by Doosan Construction in 2017, has been selected as the preferred negotiation partner and is likely to be awarded.

Doosan Construction is also showing prominence in the new fuel cell business. The Incheon Fuel Cell Project, with a construction contract worth 200 billion KRW signed in 2018, began commercial operation in June last year. In February this year, Doosan Construction, Korea Midland Power, SK Gas, and SK Securities signed an investment agreement for the Bitgoeul Eco Fuel Cell Power Plant and are currently constructing it.

◆ Q Capital Welcomes New Owner... Company Name and Brand Remain Unchanged = Doosan Construction welcomed a new owner last year when Q Capital acquired management rights. Through a 250 billion KRW capital increase, new available funds were secured. Doosan Construction plans to reinvest the injected funds into the housing business and improve both scale and profitability. The company name Doosan Construction and the We’ve and Zenith brands will continue to be used as before.

A Doosan Construction official stated, "We will continue to do our best to strengthen financial health while focusing our capabilities on sustainable growth through securing quality project orders and improving cost rates."

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