Daewoo E&C Reports Operating Profit of 421.7 Billion KRW in H1, Up 108.7% YoY

[Asia Economy Reporter Kim Hyemin] Daewoo E&C announced on the 29th that its operating profit for the first half of this year reached 421.7 billion KRW, an increase of 108.7% compared to the same period last year.

Sales amounted to 4.1464 trillion KRW, achieving 42.3% of the annual target of 9.8 trillion KRW. By business division, housing construction recorded 2.8189 trillion KRW, civil engineering 629.1 billion KRW, and plant business 426.8 billion KRW. Net profit for the period increased by 151% to 286.9 billion KRW compared to the same period last year.

A Daewoo E&C official explained, "Sales were somewhat sluggish due to some delays in housing pre-sales caused by strengthened regulations and permit delays, as well as postponed overseas PJ (private contract type) orders due to COVID-19 impact. However, operating profit significantly increased as cost ratios improved reflecting increased sales from pre-sale projects, the Vietnam THT corporation, and high-profit overseas sales in the plant sector."

New orders amounted to 4.9195 trillion KRW, achieving 43.9% of the annual plan (11.2 trillion KRW). Daewoo E&C holds an order backlog of 39.4356 trillion KRW, up 3.5% from the end of last year, securing about 4.8 years of work relative to annual sales. A Daewoo E&C official stated, "Urban maintenance projects and private contract projects selected as constructors in the first half will be reflected in this year's order performance. Overseas, projects such as the Nigeria plant are expected to be ordered soon, so the annual order target is expected to be easily achieved."

Net borrowings in the first half of this year were 500 billion KRW, about half of the amount at the end of last year. The ratio of short- to long-term borrowings also improved from 35.1% at the end of last year to 63.7%, indicating an improved financial structure.

Daewoo E&C plans to supply a total of 35,000 housing units to the market by the end of this year. Large-scale complexes such as Dunchon Jugong and Jangwi 10 District are waiting for pre-sale.