'Back in the Red' LX Hausys Takes a Breather by Extending Debt Maturities

Industry slump triggers triple blow to sales, operating profit, and net income
Three straight years of bond issuance...shifting short-term debt to long-term
Diversifying sales channels at home and abroad amid broad-based decline in construction indicators

With LX Hausys’s earnings having deteriorated sharply last year, the company now appears focused on easing its immediate financial burden and concentrating on restoring profitability. As industry prospects remain murky, LX Hausys is seeking to diversify its sales channels both at home and abroad.

According to related industry sources on February 10, LX Hausys’s consolidated sales for last year are tentatively estimated at 3.1787 trillion won, down 11% from a year earlier. Operating profit plunged 86.6% year-on-year to 13.1 billion won. Last year’s net profit of 44.3 billion won swung to a net loss of 43.9 billion won within one year.

Against this backdrop, LX Hausys recently moved to improve its borrowing structure. At the end of last month, LX Hausys issued corporate bonds totaling 130 billion won. The issue consists of 50 billion won in two-year notes and 80 billion won in three-year notes, with coupon rates of 3.4% and 3.6%, respectively. All of the proceeds will be used to repay debt maturing this year. By replacing maturing debt with new corporate bonds, the company appears to be pursuing a refinancing strategy aimed at lengthening the maturity profile of its borrowings. LX Hausys has issued corporate bonds for three consecutive years — in 2024 (124 billion won), 2025 (150 billion won), and this latest issue — and has allocated the entire proceeds each time to debt repayment.

As of the third quarter of 2025, LX Hausys’s total borrowings stood at 703.4 billion won. Of this, current borrowings (including bonds) accounted for 54.9%, slightly higher than the 49.2% recorded at the end of 2024. This means that more than half of the company’s debt is due within one year. With the latest bond issuance converting maturing obligations into longer-term debt, this ratio is expected to decline again.

This is also expected to somewhat ease the company’s liquidity burden. As of the third quarter of 2025, LX Hausys held 209.2 billion won in cash and cash equivalents, and its current ratio stood at 114.8%. The current ratio is an indicator of a company’s ability to meet short-term obligations. Generally, a ratio above 150% is considered stable, while a ratio below 100% indicates that debt due within one year exceeds assets that can be converted into cash, implying potential liquidity risk.

The key to improving the financial structure is restoring profitability, but the external business environment remains challenging. This is because all four major indicators that reflect the state of the housing supply market last year — permits, housing starts, pre-sales, and completions — declined.

According to the Ministry of Land, Infrastructure and Transport’s “Housing Statistics for December 2025,” nationwide housing permits, including non-apartment units, totaled 379,834 units from January to December last year, down 12.7% from a year earlier. Housing starts fell 10.1% to 272,685 units, and annual pre-sales of multi-family housing decreased 14.1% to 198,373 units. Nationwide completions (move-ins) also dropped 17.8% to 342,399 units. Given that the furniture and building materials industries are downstream sectors of the construction industry, many believe it will be difficult to see a sharp earnings rebound in the short term.

In response, LX Hausys plans to focus this year on strengthening price competitiveness and expanding its customer base, centering on the domestic B2C segment and overseas markets. The company intends to continue increasing customer touchpoints by combining offline channels, including LX Hausys Zin Square stores, with online sales, and to expand its sales network overseas to regions such as North America, Europe, and India by leveraging its core products such as engineered stone and flooring materials. A representative of LX Hausys said, “We will actively seek out new customers by continuously participating in overseas exhibitions held around the world.”

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