"Reflecting Prolonged COVID-19 Impact" Hyundai Construction Q3 Operating Profit 139.8 Billion KRW...41.5% YoY Decrease (Comprehensive)

[Asia Economy Reporter Yuri Kim] Hyundai Engineering & Construction announced on the 23rd that its consolidated operating profit for the third quarter of this year was 139.8 billion KRW, a 41.5% decrease compared to the same period last year. Sales decreased by 1.1% to 4.0425 trillion KRW, and net profit fell by 61.6% to 83.8 billion KRW.

Hyundai Engineering & Construction explained that the decline in operating profit was influenced by conservative accounting treatments in anticipation of the prolonged COVID-19 situation. However, despite the COVID-19 circumstances, domestic housing performance and the commencement of domestic plant projects such as the Hyundai Oilbank refinery improvement work helped maintain sales at a level similar to last year.

The cumulative operating profit from the first to the third quarter was 459.1 billion KRW, and net profit was 349.8 billion KRW, representing decreases of 33.4% and 38.2% respectively compared to the same period last year. The cumulative sales for the third quarter reached 12.6455 trillion KRW, nearly the same as the previous year (a 0.01% decrease).

Orders received increased by 22.7% year-on-year to 21.8921 trillion KRW, including domestic and overseas projects such as the Hong Kong United Christian Hospital construction, the Philippines North-South Railway Section 1 construction, Godeok Gangil apartment complex district, and Daejeon Northern Connection Line Section 2 project. This amount corresponds to approximately 87.2% of this year’s annual order target of 25.1 trillion KRW.

The order backlog also maintained 65.5623 trillion KRW, up 16.4% compared to the end of last year. Hyundai Engineering & Construction stated, "We have secured about 3.8 years of stable work."

The credit rating remains at the industry’s highest level of AA-, indicating a solid financial structure. The liquidity ratio increased by 14.7 percentage points from the end of last year to 209.2%, and the debt ratio decreased by 0.9 percentage points to 108.2%. Cash and cash equivalents (including short-term financial instruments) stand at 5.5436 trillion KRW, with net cash at approximately 2.9797 trillion KRW.

Recently, Hyundai Engineering & Construction announced the 'Hyundai Engineering & Construction 2025 Strategy,' which includes ▲expanding personnel in design, future technology, safety, and quality fields to about 40% of total staff ▲innovation and increased investment in safety personnel management ▲expansion of smart construction technologies through the introduction of ICT convergence, complex technologies, and manufacturing techniques ▲promotion of new businesses such as hydrogen fuel, biogas, and contaminated soil remediation projects. This is aimed at strengthening existing businesses and discovering new growth engines for sustainable growth.

Hyundai Engineering & Construction emphasized that it will expand its core products across all business divisions up to 15 items by adding hydrogen fuel cell power generation, marine ports, data centers, hospitals, and oil & gas to its existing core products, thereby securing global order competitiveness. A Hyundai Engineering & Construction official stated, "Despite the ongoing difficult global economy, we will continue qualitative growth by strengthening fundamental competitiveness in design, technology, and execution, and actively discovering future new growth engines."