Shinsegae Construction Reports Operating Loss of 187.8 Billion KRW Last Year... Two Consecutive Years of Deficit

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Shinsegae Construction recorded an operating loss of 187.8 billion KRW last year. This is an increase of 175.7 billion KRW compared to the operating loss of 12.04 billion KRW in 2022. Sales rose 4.9% year-on-year to 1.5026 trillion KRW.

The company explained on the 8th that "the expansion of operating losses was due to factors such as rising construction costs (raw materials and labor), sluggish sales performance caused by the real estate market downturn, and financial burdens from rising interest rates. Additionally, the preemptive reflection of expected losses also had an impact."

However, Shinsegae Construction minimized financial burdens caused by operating losses through proactive liquidity 확보. Earlier this year, it secured approximately 265 billion KRW in liquidity in advance through a corporate bond program with financial institutions and the absorption merger of Shinsegae Yeongrangho Resort.

The company stated, "This amount exceeded the approximately 200 billion KRW in guarantee liabilities expected to mature in the first half of the year," adding, "We also completed most of the maturity extension negotiations for major business sites, further reducing the repayment burden of guarantee liabilities more than expected."

Although the debt ratio was 953% as of December 2023, it decreased to around the 600% level as of January 2024 due to capital expansion from the Yeongrangho absorption merger. Furthermore, additional financial measures will be taken within this month to lower the debt ratio to approximately the 400% range.

The company said, "We plan to promote management efficiency by reorganizing the business structure and organization through a company-wide review this year," and added, "We intend to improve performance by successfully carrying out high-quality projects, including the group's upcoming large-scale projects."

It also stated, "Shinsegae Group will actively consider various support measures such as financial assistance by continuously monitoring liquidity flows at the group level to stabilize the construction division's financial structure."

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