DL E&C Reports Operating Profit of 331.2 Billion KRW Last Year... "Expecting Profitability Improvement This Year"

Operating Profit Target of 520 Billion KRW and Orders of 11.6 Trillion KRW This Year
"25% Net Profit Return to Shareholders by 2026"

DL E&C announced on the 1st that it achieved consolidated sales of KRW 7.9945 trillion and an operating profit of KRW 331.2 billion in 2023.

Photo by DL E&C

Sales increased by 6.6% compared to the previous year, but operating profit decreased by 33.4%. DL E&C explained that the decline in operating profit was due to the continued impact of soaring construction material prices. However, quarterly operating profit showed an increase for three consecutive quarters starting from the second quarter after hitting a low in the first quarter of last year, leading to expectations of a significant improvement in profitability from this year onward.

New orders rose by 25.2% year-on-year to KRW 14.8894 trillion, surpassing the annual target of KRW 14.4 trillion. Notably, orders in the civil engineering and plant sectors stood out. The civil engineering business secured KRW 1.429 trillion in orders, a 142.5% increase compared to the previous year, including the Namhae-Yeosu Undersea Tunnel project, while the plant business achieved KRW 3.4606 trillion in orders, up 98.2%, driven by the Shahin project orders.

The housing business order performance also improved. Including the KRW 2.3881 trillion 'Baekhyeon MICE' urban development project ordered in the third quarter of last year, total orders reached KRW 6.7192 trillion. DL Construction, a subsidiary, secured KRW 3.2806 trillion in new orders last year.

DL E&C emphasized that it maintained financial stability without disruption, recording a net cash position of KRW 1.1 trillion and a debt ratio of 97.2% on a consolidated basis at the end of last year. Although some construction companies’ credit ratings were adjusted recently due to risks related to real estate project financing (PF) guarantees, DL E&C maintains the highest 'AA-' rating among major construction companies.

DL E&C set targets for this year of consolidated sales of KRW 8.9 trillion, operating profit of KRW 520 billion, and new orders of KRW 11.6 trillion. Compared to last year, the sales target was raised by about KRW 1 trillion, and operating profit was increased by more than 57%.

Meanwhile, DL E&C held a board meeting on the same day and resolved to cancel 2,939,077 shares of its common stock held as treasury stock. This corresponds to 7.6% of the total issued common shares. The purpose is to protect shareholder interests by preemptively canceling the number of shares to be newly issued ahead of the comprehensive stock swap with its subsidiary DL Construction.

Additionally, from this year through 2026, DL E&C plans to use 25% of consolidated net profit for shareholder returns. The 25% shareholder return rate consists of a 10% cash dividend and 15% treasury stock repurchase. This is a 10 percentage point improvement compared to the previous shareholder return rate of 15% (10% cash dividend + 5% treasury stock repurchase).

A DL E&C official stated, "Despite the overall challenging management environment in the construction industry, we will focus on securing orders for high-profit, quality projects." He added, "Based on a stable financial structure, we will leverage our extensive construction experience and know-how to increase sales and profits, and lead the industry in terms of shareholder returns."

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