Hyundai Construction Reports 1.2 Trillion KRW Operating Loss Last Year..."Subsidiary Project Costs Reflected"

Annual Financial Results for Last Year Revealed
Subsidiary's Overseas Project Losses Lead to Deficit
Sales and New Orders Exceed Targets Despite Operating Loss
Focus on Clean Energy and Profitability Improvement This Year

Hyundai Engineering & Construction announced on the 22nd that its consolidated operating loss for last year was preliminarily estimated at 1.2209 trillion KRW. The company turned to a deficit after reflecting temporary costs incurred from overseas projects of its subsidiary Hyundai Engineering. Previously, the company posted an operating profit of 785.4 billion KRW in 2023.

The subsidiary's projects where costs occurred are ongoing in Indonesia (oil refinery) and Saudi Arabia (two gas processing facilities). Due to rising construction costs, negotiations have been ongoing with the clients, and the subsidiary stated that they plan to continue steady negotiations even after reflecting these costs. Hyundai Engineering & Construction also stated, "We plan to re-examine processes and strengthen process management to accelerate the normalization of profitability."

Hyundai Engineering & Construction's preliminary sales for last year were 32.6944 trillion KRW, about 10% higher than in 2023. This exceeded the annual target of 29.7 trillion KRW by 10%. New orders last year amounted to 30.5281 trillion KRW, also exceeding the target level by more than 5%.

Hyundai Engineering Uzbekistan GTL Plant. Provided by Hyundai Engineering

Major housing projects include the construction of apartment complexes in Daejeon Doan 2-2 District, the redevelopment project of Busan Goejeong District 5, as well as the design of the large-scale Kozloduy nuclear power plant in Bulgaria, and Package 2 of the Saudi Jafurah project. The order backlog as of the end of the year was 89.9316 trillion KRW.

Cash and cash equivalents (including short-term financial instruments) amounted to 5.3964 trillion KRW, net cash was 2.1498 trillion KRW, the current ratio indicating payment ability was 144.7%, and the debt ratio was 178.8%. The net loss for the period was 736.4 billion KRW, but the company stated that it maintained profitability on a separate basis.

This year, the sales target is set at 30.3873 trillion KRW, the order target at 31.1412 trillion KRW, and the operating profit target at 1.1828 trillion KRW. The company plans to focus on expanding the energy value chain, developing innovative technologies and products, and promoting overseas businesses with low competition and high added value.

Hyundai Construction Gyedong Building. Provided by Hyundai Construction

A Hyundai Engineering & Construction official said, "We will expand clean energy businesses including large-scale nuclear power plants with global competitiveness, small modular reactors (SMR), offshore wind power, solar power, and hydrogen projects to respond to climate change and explosive energy consumption growth," adding, "Improving profitability is our top priority, and we will do our best to secure future new growth engines."

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