DL E&C Q3 Operating Profit 83.3 Billion KRW... 3.7% Increase YoY

DL E&C announced on the 31st that its operating profit on a consolidated basis for the third quarter of this year reached 83.3 billion KRW, a 3.7% increase compared to the same period last year. The cumulative operating profit for the first to third quarters was tentatively estimated at 176.8 billion KRW.

Photo by DL E&C

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Contrary to market expectations that operating profit would decline compared to the same period last year, DL E&C judged that the increase in third-quarter operating profit marked the beginning of a full-scale performance improvement trend. Third-quarter sales rose 4.4% year-on-year to 1.9189 trillion KRW. Cumulative sales amounted to 5.8796 trillion KRW.

New orders in the third quarter of this year totaled 2.9134 trillion KRW, down 43.1% from the third quarter of last year. DL E&C explained that this was due to a base effect from the inclusion of the Baekhyeon MICE urban development project order worth about 2.4 trillion KRW in the third quarter of last year, and excluding that project, new orders increased by more than 6%.

The Housing Business Division secured orders for the Jamsil Woosung 4th Reconstruction in Songpa-gu worth 381.7 billion KRW in early July, the Dogok-dong Gaepo Hanshin Reconstruction worth 438.5 billion KRW at the end of August, and the Jayang 7 District Reconstruction in Gwangjin-gu worth 360.7 billion KRW in October. With this, DL E&C surpassed 1 trillion KRW in urban maintenance project orders this year. The company plans to actively pursue major urban maintenance projects in Seoul, including Hannam 5 District in Yongsan-gu.

The Civil Engineering Business Division also secured an order in August for the Yeongdong Pumped Storage Power Plant construction worth 481.8 billion KRW. The Plant Business Division won a 254.6 billion KRW contract this month for the modernization of Block 1 of the Bundang Combined Cycle Power Plant and plans to secure additional orders worth about 2 trillion KRW by the end of the year. Additionally, DL E&C expects rapid visible results in the SMR (Small Modular Reactor) market as X-Energy, a U.S. company jointly pursuing the SMR business with DL E&C, recently signed a large-scale investment agreement with Amazon.

DL E&C’s cost ratio in the third quarter improved by 2.4 percentage points from the previous quarter to 87.8%. Its wholly owned subsidiary DL Construction also recorded a cost ratio of 92.2%, improving by 3.4 percentage points from the previous quarter. As of the end of the third quarter on a consolidated basis, DL E&C’s debt ratio was 104.2%, holding cash and cash equivalents of 2.2366 trillion KRW and net cash of 1.0308 trillion KRW.

A DL E&C official said, “The construction industry is having a difficult year due to the real estate market downturn and deteriorating profitability,” adding, “DL E&C will realize gradual performance improvement in the future by securing high-quality new orders with guaranteed profitability based on thorough risk management and a solid financial structure.”

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