Daewoo Construction Reports Q3 Sales of 2.52 Trillion KRW, Up 20% YoY

"Abundant Cash... No Liquidity Risk from Real Estate PF Risk"

Daewoo E&C announced on the 27th that its preliminary Q3 2022 results showed sales of KRW 2.5205 trillion, up 20.0% year-on-year, operating profit increased by 83.0% to KRW 205.5 billion, and net profit rose 95.0% to KRW 174.3 billion.

Looking at the cumulative results up to Q3 this year, sales reached KRW 7.2109 trillion, up 15.4% compared to the same period last year (KRW 6.2465 trillion), achieving 72.1% of the annual target of KRW 10 trillion.

Sales by business division were ▲Housing Construction Division KRW 4.6535 trillion ▲Civil Engineering Division KRW 1.3525 trillion ▲Plant Division KRW 980 billion ▲Other Consolidated Subsidiaries KRW 224.9 billion. Operating profit recorded KRW 513.2 billion, down 3.9% from the same period last year, while net profit rose 5.3% to KRW 396.4 billion.

A Daewoo E&C official said, "Sales growth is solidly continuing across all business sectors including housing construction, civil engineering, and plant both domestically and internationally," adding, "Since we conservatively and proactively reflected the increase in cost ratio in the housing construction division due to soaring raw material prices, outsourcing costs, and labor costs in Q2, we expect to maintain stable performance going forward."

New orders increased 44.7% year-on-year to KRW 11.0415 trillion, achieving 90.5% of this year’s target of KRW 12.2 trillion announced at the beginning of the year within just three quarters.

In Q3 this year, Daewoo E&C secured domestic projects including the Ulsan North Port Energy Terminal Phase 3 construction and Bucheon Combined Heat and Power Plant main equipment procurement. In the urban redevelopment sector, it won projects such as Incheon Sipjeong 4 District and Gwangju Unnam District redevelopment, accumulating a total of 11 projects worth KRW 3.0587 trillion so far. Overseas, it secured projects including the Vietnam THT B1CC4 office new construction.

A Daewoo E&C official stated, "With housing construction and plant business orders already meeting the annual guideline by Q3, and considering pending contracts and the confirmation of large civil engineering project orders in Q4, we expect to easily achieve the annual target," adding, "Sales growth trends are clear across all business sectors, and considering expected Q4 sales from the Vietnam THT corporation, the annual sales target of KRW 10 trillion seems achievable without difficulty."

Meanwhile, efforts to improve financial soundness are also underway. Amid growing concerns in the construction industry about contingent liabilities related to PF guarantees, Daewoo E&C is known to hold a significant level of cash equivalents compared to short-term borrowings and PF guarantee contingent liabilities.

The debt ratio stood at 200.3%, down 24.8 percentage points from the end of last year. A Daewoo E&C official said, "As of the end of September, we hold about KRW 2.2 trillion in cash equivalents, which allows us to maintain over KRW 700 billion in cash equivalents even if short-term debt repayments and risks related to PF guarantee liabilities from developers before construction occur simultaneously," adding, "Considering cash inflows from net profit, we have secured stable liquidity."

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