Decrease in On-site Orders and Rising Cost Rates Cause
Q3 New Orders Total 7.3722 Trillion KRW
Achieving 64.1% of Annual Order Target
Selected Contractor for Gangnam Reconstruction, Exploring New Overseas Markets
Daewoo E&C announced on the 30th that its operating profit for the third quarter recorded 62.3 billion KRW, a 67.2% decrease compared to the same period last year (190.2 billion KRW).
According to the preliminary consolidated results for the third quarter, sales amounted to 2.5478 trillion KRW, down 14.8% from 2.9901 trillion KRW in the same period last year. By business division, the Housing Construction Division recorded sales of 1.6434 trillion KRW, the Civil Engineering Division 516.4 billion KRW, the Plant Division 289.4 billion KRW, and other consolidated subsidiaries 98.6 billion KRW.
A Daewoo E&C official explained, "Sales and operating profit declined due to a decrease in the number of ongoing sites, continued increases in cost ratios, and temporary additional cost reflections at some sites," adding, "We plan to improve profitability by promoting the commencement of already secured projects and expanding sales focused on large, profitable sites such as the Nigeria site."
The cumulative new orders in the third quarter reached 7.3722 trillion KRW, achieving 64.1% of the annual order target of 11.5 trillion KRW. In the third quarter, orders were secured for the Busan Namcheon-dong residential-commercial complex (633.3 billion KRW), Hanam Gyosan and Namyangju Wangsuk package (377.2 billion KRW), and Sinbanpo 16th complex (246.9 billion KRW). As of the end of the third quarter, the order backlog stood at 44.7777 trillion KRW, equivalent to 3.8 years of work based on annual sales.
Daewoo E&C plans to continue improving its structure and strengthening its fundamentals for sustainable growth. It was selected as the contractor for Gaepo Jugong 5th Complex and Sinbanpo 16th in the Gangnam and Seocho areas, and high-profit non-residential projects such as the G-TOWN development project in Gwacheon Knowledge Information Town and the undergrounding project of the Dongbu arterial road have commenced.
Overseas, the company entered the new market of Turkmenistan and started additional overseas urban development projects following the Starlake new city. A Daewoo E&C official stated, "We were recently selected as the successful bidder for the Turkmenistan mineral fertilizer plant project worth about 1 trillion KRW and received investor approval for the Thai Binh Province Kien Giang new city development project in Vietnam," adding, "In the second half of the year, we will focus our capabilities on securing quality orders and risk management in key overseas hubs such as Nigeria, Iraq, and Vietnam to achieve this year's goals."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
