Jungheung Togeon Reports 67.3 Billion KRW Loss Last Year... Jungheung Construction's Operating Profit Also Drops 86%

Jungheung Togeon posts 67.3 billion KRW loss in 2024... Sales down 12%
Soaring cost ratio at 98.2%... Profitability collapses, debt ratio rises
Jungheung Construction's operating profit drops 86%... Construction sales plunge 62%

Jungheung Construction Group's holding company, Jungheung Togeon, reported a turnaround to a loss last year. Its construction affiliate, Jungheung Construction, also recorded sluggish performance. Both companies share the apartment brand 'Jungheung S-Class' and focus primarily on the housing business.

Exterior view of the Jungheung Construction Group headquarters. Provided by Jungheung Construction Group.

According to the Financial Supervisory Service's electronic disclosure system on the 12th, Jungheung Togeon, ranked 16th in construction capability evaluation, posted sales of 1.1613 trillion KRW and an operating loss of 67.3 billion KRW in 2024. Sales decreased by 11.6% compared to the previous year, and operating profit turned into a loss from 47.7 billion KRW.

The profitability worsened as the cost ratio (cost to sales ratio) soared. The cost ratio increased by 7.7 percentage points from 90.5% in 2023 to 98.2% in 2024. The gross profit in 2024 was 21.2 billion KRW, down 103.4 billion KRW from 124.6 billion KRW a year earlier. Meanwhile, selling and administrative expenses rose by 15.1% to 88.5 billion KRW during the same period, plunging the company into the red. The debt ratio, calculated by dividing total liabilities by total equity, also slightly increased from 123% to 149%.

Jungheung Construction, ranked 52nd in construction capability evaluation, also experienced a downturn. It recorded sales of 260.5 billion KRW and operating profit of 2.3 billion KRW in 2024, down 41.5% and 86.2%, respectively, compared to the previous year. Construction sales shrank by 61.7%, from 311.5 billion KRW in 2023 to 118.8 billion KRW in 2024, contracting its scale. The fact that it avoided losses unlike Jungheung Togeon was due to successful cost ratio management. Jungheung Construction's cost ratio was 87.7%, a decrease of 0.6 percentage points compared to 2023.

Jungheung Construction Group is the largest construction company headquartered in Honam. As of 2024, it has 53 affiliates. Jungheung Togeon, the holding company, is 100% owned by Vice Chairman Jung Wonju, the eldest son of founder Group Chairman Jung Changseon. The largest affiliate is Daewoo Construction, ranked 3rd in construction capability evaluation. Daewoo Construction, which announced its performance in February, also saw its operating profit decrease by 39.2% compared to the previous year.