Hyundai Engineering & Construction Reports KRW 180.9 Billion Operating Profit in Q1, Down 15% YoY

Hyundai Engineering & Construction announced on April 28 that its consolidated operating profit for the first quarter of this year was KRW 180.9 billion, down 15.4% compared to the same period last year. Revenue came in at KRW 6.2813 trillion, a decrease of 15.8% over the same period. Net profit for the period was KRW 206.8 billion, an increase of 24.0%.

Operating profit increased by more than KRW 30 billion on a standalone basis for Hyundai Engineering & Construction, but declined overall as operating profit from its subsidiary Hyundai Engineering and other segments fell significantly. The company attributed the decrease to an increase of KRW 34.2 billion in provisions for bad debts, likely reflecting overdue construction receivables and others. Selling and administrative expenses also rose, including an increase of KRW 25.5 billion in labor costs. The company stated, "Profitability is expected to gradually improve on a quarterly basis, driven by improvements in the housing segment and the sequential completion of high-cost plant projects."

Revenue at both Hyundai Engineering & Construction and Hyundai Engineering decreased significantly in the building and housing segments. The company has set its annual revenue target at KRW 27.4 trillion, achieving 22.9% of the first-quarter goal.

Hyundai Construction Gyedong Office Building

Orders for the first quarter stood at KRW 3.9621 trillion, a decrease of 58.0% from the first quarter of last year. In the first quarter of last year, the company secured more than KRW 9 trillion in contracts, including large-scale mixed-use development projects. However, this year, orders dropped sharply, particularly in the building and housing segments.

From the second quarter onward, the company expects to secure key projects such as an electric arc furnace steel mill in the United States, the Palisades Small Modular Reactor (SMR) project, and the Bokjeong Station area development project. If successful, the company believes it can stably achieve its annual order target of KRW 33.4 trillion. As of the end of the first quarter, Hyundai Engineering & Construction's order backlog was KRW 92.3237 trillion, which is equivalent to approximately 3.4 years’ worth of work.

A Hyundai Engineering & Construction representative said, "Based on our proactive management system, we will strengthen our energy portfolio, including nuclear power, to establish a robust business structure."

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