Hanwha Construction Division Posts Q1 Operating Profit of 13 Billion Won, Up 39% Year-on-Year

Operating Profit Rises 39% Amid High Interest Rates and Project Gaps
Profitability Expected to Accelerate in Q2 with Projects Like Seoul Station North Development
Annual Order Target Set at 4.1 Trillion Won... Building and Development Account for Over 90%

Amid a general contraction in the construction industry due to high interest rates and a lack of large-scale projects, Hanwha Construction Division has successfully defended its performance by focusing on profitability-driven strategies. Starting in the second quarter, the company is expected to enter a phase of significant growth with the resumption of its housing project in Iraq and the groundbreaking of key domestic and international sites, such as the Seoul Station North Development.

According to the Financial Supervisory Service's electronic disclosure on May 7, Hanwha Construction Division posted sales of 653.6 billion won and an operating profit of 13 billion won in the first quarter of this year. While sales decreased by 32% compared to the same period last year, operating profit increased by 39%. The operating margin was 2.0%, up 1.0 percentage point year-on-year. The company explained, "Although the completion of large-scale projects and the transfer of some businesses led to a decrease in overall volume, we were able to defend profitability through improved cost ratios and cost efficiency." Last year, Hanwha Construction Division transferred its plant and offshore wind power businesses to Hanwha Ocean.

Hanwha Construction Division has completed the construction of 30,000 units in the Bismayah New City Project (BNCP) in Iraq and has begun work on the remaining 70,000 units. The company's construction order backlog stands at 9.2 trillion won. In Korea, major projects are set to break ground, starting with the Seoul Station North Redevelopment (total project cost: 3.1 trillion won) in December last year, followed by the Suseo Station Transfer Center (1.6 trillion won) and the Jamsil MICE Development (2.2 trillion won).

Meanwhile, new orders in the first quarter totaled only 14.7 billion won. Most of these were for the Mokpo Resource Recovery Facility service and contract modifications, while core orders are expected to be reflected in the results starting from the second quarter. Hanwha has set an annual order target of 4.1 trillion won for this year, with plans to secure more than 3.6 trillion won in the building and development sector alone.