DL E&C's Corporate Bond Demand Forecast Receives 8 Times Target, 'Successful'

DL E&C achieved an unusual success in the corporate bond market.

DL E&C announced on the 3rd that it received orders totaling 805 billion KRW in the demand forecast for corporate bond issuance conducted on the 2nd. Initially, the demand forecast was conducted for a total of 100 billion KRW, including 60 billion KRW for 2-year bonds and 40 billion KRW for 3-year bonds, but as a result, orders were received for 520 billion KRW for 2-year bonds and 285 billion KRW for 3-year bonds, which is an astonishing eight times the planned amount.

DL E&C D-Tower Donuimun Office / Photo by DL E&C

This is considered an unusual success in a situation where investment sentiment in construction bonds has frozen due to the overall downturn in the construction industry caused by the recent real estate market slump and the contingent liability risk of real estate project financing (PF).

DL E&C analyzed that its excellent financial stability and stable business foundation with a diverse portfolio were key strengths. DL E&C recently received an 'AA- (Stable)' rating, the highest level in the construction industry, in its corporate bond credit rating evaluation, maintaining this rating for six consecutive years since 2019.

It also stated that its fundamental strength is solid, maintaining a net cash position since 2021. As of the first quarter of this year, the consolidated net cash stood at 1.2506 trillion KRW, an increase of 189.6 billion KRW compared to the end of last year, and cash and cash equivalents were recorded at 2.432 trillion KRW. Operating cash flow was 277.4 billion KRW. On the other hand, the debt reliance ratio is only 13.5%. The debt ratio also recorded 102.3%, one of the lowest levels in the industry.

DL E&C has been striving to build a balanced business portfolio and emphasized that this year as well, it is selectively securing orders centered on highly profitable quality projects in the housing, civil engineering, and plant sectors. It plans to achieve gradual profit improvement from the second half of this year by continuously managing risks and costs.

A DL E&C official said, "Many investors highly evaluated DL E&C's excellent market position, stable business foundation, and outstanding financial stability," adding, "We will continue profitability-focused internal management and risk management to overcome various challenges in the industry and meet investors' expectations."