Hyundai Construction "Operating Profit of 882.1 Billion KRW Last Year, Up 5%... Targeting 1 Trillion KRW This Year"

[Asia Economy Reporter Yuri Kim] Hyundai Engineering & Construction achieved an operating profit of 882.1 billion KRW last year.

On the 22nd, Hyundai Engineering & Construction announced that its preliminary consolidated results for 2019 recorded an operating profit of 882.1 billion KRW and a net profit of 578.6 billion KRW, representing increases of 5.0% and 8.1% respectively compared to the previous year. Sales rose by 3.4% to 17.2998 trillion KRW. The operating profit margin remained in the 5% range.

Orders received exceeded the initial target of 24.1 trillion KRW, reaching 24.2521 trillion KRW, a 27.4% increase year-on-year. This was due to securing overseas projects such as the Saudi Majan Project (Package 6&12), Singapore North-South Corridor N113·N115 sections, and Vietnam Vega City complex development, as well as domestic projects including the Gimpo-Paju Section 2 of the expressway and Songdo B2BL residential-commercial complex. Hyundai Engineering & Construction stated, "This year, we plan to focus on construction types with technical and regional competitive advantages such as marine ports, gas plants, complex developments, coal power plants, and power transmission and transformation, leveraging our abundant overseas project experience and technology."

The backlog of orders also maintained a 0.9% increase from the end of the previous year, standing at 56.3291 trillion KRW. Hyundai Engineering & Construction explained that it has secured about 3.3 years' worth of stable work.

The debt ratio improved by 9.6 percentage points from the end of the previous year to 108.1%, and the liquidity ratio, indicating payment ability, improved by 4.1 percentage points to 198.5%. The company explained that its credit rating remains solid at the industry's top level of AA-, maintaining a strong financial structure. The amount of unbilled construction also steadily decreased, dropping by 320 billion KRW compared to the previous year to 2.3597 trillion KRW (approximately 13% of sales).

Hyundai Engineering & Construction said, "This year, we plan to continue qualitative growth focused on profitability by strengthening competitiveness in design, order acquisition, and execution."

Sales this year are expected to increase by 0.6% from last year to 17.4 trillion KRW, driven by the full-scale sales of large overseas projects such as the Kuwait Al-Zour LNG Terminal construction and the Saudi Majan Project, as well as expansion of domestic business sales. Operating profit is also targeted to increase by 13% from last year to 1 trillion KRW through sales growth and improved profitability in overseas sectors.