Operating Profit Margin at 5.4% in the First Half, Up 1.3 Percentage Points
Focusing on Solid Internal Management Amid Challenging Construction Environment
Amid the ongoing slump in the construction industry, Daewoo Engineering & Construction announced on the 29th that it recorded sales of 2.2733 trillion won and an operating profit of 82.2 billion won in the second quarter of this year. Compared to the same period last year, sales decreased by 19.4% and operating profit fell by 21.6%. The company posted a net loss of 43 billion won, turning to a deficit.
Combined sales for the first and second quarters amounted to 4.35 trillion won, a decrease of 18.1% compared to the same period last year. However, operating profit increased by 6.3% year-on-year to 233.5 billion won.
Daewoo Engineering & Construction stated, "The decrease in the number of sites led to a reduction in sales," adding, "However, operating profit increased as we sequentially completed sites that began construction during periods of rising construction costs and improved profitability in the housing and building business segment." The company further explained, "Despite the challenging construction management environment, we focused on solid internal management, resulting in an operating profit margin of 5.4%, up 1.3 percentage points from the same period last year."
By business segment, as of the first half of the year, the housing and building business posted sales of 2.8573 trillion won, the civil engineering segment 842.3 billion won, the plant segment 485.6 billion won, and other consolidated subsidiaries 164.8 billion won. Daewoo Engineering & Construction explained that robust performance at major domestic housing and building sites such as Baegunhosu Prugio, Yeongtong Prugio Pineber, and Gangnam Data Center, as well as overseas sites in Iraq and Nigeria, drove results, achieving 51.8% of the annual sales target.
New orders in the first half reached 5.8224 trillion won, a 32.3% increase compared to the same period last year. Orders included the reconstruction of Gaepo Jugong Complex 5 in Seoul (697 billion won) and the Cheongna International Business District B1BL officetel in Incheon (479.5 billion won) in the first quarter, as well as the Turkmenistan mineral fertilizer plant (940.1 billion won), Seoul Yeongdeungpo 1-11 district urban environment redevelopment project (510.3 billion won), and Pungmu Station B3BL apartment complex (358.3 billion won) in the second quarter.
As of the end of the first half, the order backlog stood at 44.9933 trillion won. This secures approximately 4.3 years' worth of stable work based on annual sales, laying the foundation for sustainable growth. The urban redevelopment segment accounted for the largest share, with an order backlog of 20.915 trillion won.
Daewoo Engineering & Construction plans to strengthen profitability-focused internal management and actively expand into overseas markets this year to overcome the uncertain construction market environment and establish a foundation for sustainable growth.
A Daewoo Engineering & Construction official stated, "In the second half, we expect to secure large-scale overseas projects such as the Czech nuclear power plant, the Al Faw naval and air force bases in Iraq, and the Kien Giang new city development project in Thai Binh Province, Vietnam." The official added, "Domestically, we will expand housing and building projects focused on the Seoul metropolitan area with strong sales potential and, in particular, concentrate on winning key urban redevelopment projects to exceed this year's targets."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
