IT infrastructure engineering specialist company Ringnet announced on May 28 that it is strengthening its profitability-focused strategy alongside the release of its first-quarter results.
First-quarter sales and operating profit were 25.8 billion KRW and 960.43 million KRW, respectively. Both figures decreased compared to the same period last year. A Ringnet representative explained, "The revenue recognition standard has changed from 'percentage of completion' to 'tax invoice issuance' basis," and stated, "This has caused revenue and gross profit to be deferred." The representative added, "Due to the nature of the IT infrastructure industry, large-scale projects are typically concentrated in the second half of the year, so we expect annual performance to follow a growth trend similar to previous years."
Ringnet has continued to pursue a strategy of focusing on core competencies based on stable financial structure and profitability. This year, the company's corporate credit rating was upgraded by one notch to AA-.
A company representative emphasized, "This is the first time a mid-sized IT infrastructure company listed on KOSDAQ in Korea has officially received recognition for financial soundness and credibility at the level of a large corporation."
Ringnet has recorded a high return on equity (ROE), cumulative profits and cash liquidity, and a low debt ratio. In addition, continuous profitability and a diversified business portfolio with more than 450 client companies are cited as factors behind the improved credit rating.
The acquisition of an AA- credit rating not only enhances Ringnet's external credibility, but also increases its competitiveness in bidding for contracts with public institutions and large enterprises. It is expected to contribute to the overall improvement of business execution capabilities. In addition, actual sales growth is anticipated through financial cost optimization by reducing funding costs and expanding new clients.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
