Hyundai Construction Reports Q3 Operating Profit of 220.4 Billion KRW, Up 57.6% Year-on-Year (Comprehensive)

Sales of 4.352 trillion KRW (up 7.7% YoY), operating profit of 220.4 billion KRW (up 57.6% YoY)
New orders of 23.6371 trillion KRW (up 8.0% YoY), achieving about 93% of annual order target
Order backlog of 77.2312 trillion KRW, up 18.3% from end of last year... securing about 4 years of work
Cash and cash equivalents of 5.2567 trillion KRW, net cash of 3.0653 trillion KRW
Expanding investments for sustainable growth based on solid financial structure and highest credit rating
Securing core technologies, construction automation, smart city

[Asia Economy Reporter Kangwook Cho] Hyundai Engineering & Construction achieved management performance in line with market expectations through solid domestic housing results and the full-scale growth of overseas sales.

On the 22nd, Hyundai Engineering & Construction announced that its preliminary tally of the third quarter 2021 results showed third-quarter sales of 4.352 trillion KRW, operating profit of 220.4 billion KRW, and net profit of 148.4 billion KRW.

Compared to the same period last year, sales increased by 7.7%, operating profit by 57.6%, and net profit by 77.1%, achieving stable performance. In particular, the operating profit margin improved to the 5% range.

Hyundai Engineering & Construction explained that growth continued due to the full-scale progress of large domestic and overseas sites and the commencement of new overseas construction projects.

Large overseas sites such as the Saudi Majan Gas Processing Plant and Qatar Lusail Plaza Tower are progressing in full swing, and plant projects like the Hyundai Chemical HPC Project Package-1 site, as well as continuous domestic housing sales at the D.H. Firstier I-Park site, contributed to increased sales and operating profit compared to the same period last year.

In particular, the company stated that overseas sales increased compared to the first half of this year, raising expectations for a rebound in overseas sales in the second half of the year.

Operating profit for the third quarter recorded 220.4 billion KRW, a 57.6% increase compared to the same period last year. This significant rise was due to continuous sales growth and improved profitability in the overseas sector.

On a cumulative basis for the first three quarters, sales reached 12.8851 trillion KRW, operating profit 562.2 billion KRW, and net profit 427.7 billion KRW. Compared to the same period last year, cumulative sales increased by 1.9%, operating profit by 22.5%, and net profit by 22.3%, achieving results in line with market expectations.

Orders amounted to 23.6371 trillion KRW through domestic projects such as Changwon Masan Hoeweon District 2 redevelopment, Osan Galgot-dong regional housing association new construction, and Jeju Hallim offshore wind power investment development, as well as overseas projects including Singapore Shaw Tower construction, Peru Chinchero New Airport Terminal PKG2 construction, and Saudi Hail-Al Jouf 380kV transmission line construction.

The order backlog also maintained 77.2312 trillion KRW, an 18.3% increase compared to the end of last year, securing about four years of stable work.

Despite the prolonged COVID-19 pandemic and the low oil price trend in the challenging global environment, Hyundai Engineering & Construction maintains stability based on a solid financial structure and top credit rating.

The credit rating is AA-, the highest level in the industry, continuing a robust financial structure. The liquidity ratio was 200.2%, and the debt ratio was 103.2%.

In particular, cash and cash equivalents (including short-term financial instruments) amount to 5.2567 trillion KRW, and net cash is 3.0653 trillion KRW, demonstrating abundant cash liquidity.

This solid financial structure allows the application of the industry's lowest interest rates when raising funds for project execution. Additionally, business partners participating in projects together can also receive the same benefits, creating a win-win effect, the company explained.

Going forward, Hyundai Engineering & Construction plans to continue the upward trend in third-quarter management performance through the end of the year, accelerating mid- to long-term stable management and maintaining market trust through continuous profitability improvement.

Furthermore, as a global construction leader, the company will proactively respond to internal and external management environments such as the transition to eco-friendly and low-carbon industrial infrastructure and accelerate business transformation linked to future business strategies.

A Hyundai Engineering & Construction official said, “Even in a situation where change and uncertainty are accelerating, we will strengthen our fundamental EPC competitiveness, focus all efforts on new businesses such as construction automation, smart cities, renewable energy, and eco-friendliness, and become a ‘Total Solution Creator’ covering all construction areas from investment development to operation.”