[Asia Economy Reporter Yoo In-ho] Daewoo E&C announced on the 29th through a public disclosure that its consolidated management performance up to the third quarter showed cumulative results of new orders worth 8.4745 trillion KRW, sales of 5.8453 trillion KRW, operating profit of 305 billion KRW, and net profit of 170.3 billion KRW.
Daewoo E&C recorded new orders of 8.4745 trillion KRW up to the third quarter, achieving 66% of this year’s target of 12.77 trillion KRW. This is a 14.2% increase compared to the same period last year (7.4226 trillion KRW). It amounts to 98% of the 2019 sales revenue (8.6519 trillion KRW).
Daewoo E&C currently holds an order backlog of 35.2941 trillion KRW, securing work volume 4.1 times the sales revenue. This is about 2.5 trillion KRW more than the 32.8827 trillion KRW at the end of last year.
The cumulative sales for the third quarter recorded 5.8453 trillion KRW, achieving 65% of the annual target of 9.05 trillion KRW. Sales by business division were ▲ Housing Construction Division 3.7644 trillion KRW ▲ Plant Division 827.8 billion KRW ▲ Civil Engineering Division 1.0856 trillion KRW ▲ Consolidated subsidiaries 167.5 billion KRW.
Operating profit was 305 billion KRW, about 4.5% lower than the same period last year (319.3 billion KRW), but the operating profit margin improved by 0.2 percentage points to 5.2%, showing enhanced profitability.
Gross profit was 616.2 billion KRW, and the gross profit margin was 10.5%, maintaining profitability compared to the same period last year (666.5 billion KRW, 10.5%). Net profit recorded 170.3 billion KRW.
A Daewoo E&C official said, “Due to COVID-19, some domestic pre-sale projects were postponed and overseas construction sites were delayed, causing a slight decrease in sales. However, recently, housing pre-sales have been progressing smoothly, and overseas sites are gradually normalizing, so we expect a full-scale rebound in sales and operating profit from the end of the year.”
Daewoo E&C supplied 25,994 residential units up to the third quarter, achieving 76% of this year’s plan. By the end of the year, it plans to supply a total of about 35,000 units, expected to record the highest volume among private construction companies this year as well. Based on the achievements in the housing sector this year, Daewoo E&C plans to overcome the increasingly uncertain domestic and international business environment and lay the foundation for mid- to long-term growth.
In fact, Daewoo E&C is generating stable profits by rapidly increasing its order backlog in the domestic housing construction sector and securing many housing sites with excellent pre-sale performance.
Overseas, order backlogs with good profitability are increasing, including the Iraq container terminal and Al-Faw connecting road site, and Nigeria LNG7. With additional sales expected from the Vietnam THT corporation, a performance turnaround is anticipated to become visible.
As of the third quarter of 2020, the debt ratio decreased by 16.1% compared to the end of 2019, and net borrowings also decreased by 302.3 billion KRW, rapidly improving financial stability.
Next year, with the full-scale launch of high-quality large-scale proprietary projects such as Incheon Lu-Won City, Asan Tangjeong, Yangju Station Area, Suwon Mangpo District, Gimpo Pungmu Station Area, and Busan Beomil-dong, sales and operating profit are expected to follow an upward curve.
A Daewoo E&C official said, “Despite the deteriorated domestic and international business environment this year due to COVID-19 and falling oil prices, we recorded top-tier order achievements both domestically and internationally. In the fourth quarter, contracts such as the follow-up work for the Iraq Al-Faw new port and the Nigerian refinery facility construction are scheduled, so we expect to easily achieve this year’s order target.”
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