Achieving the Lowest Cost Ratio in Three Years...
Profitability Improvement in the Housing Business Drives Performance
Debt Ratio at 96%, Net Cash Holdings of 1.0153 Trillion Won...
Maintaining the Industry’s Highest Financial Stability
Continued Selective Orders Based on Risk Management...
Performance Expected to Rise in the Second Half
Despite the overall downturn in the construction industry, DL E&C has recorded an earnings surprise that exceeded market expectations. The company achieved its lowest cost ratio in three years and recovered operating profit in the 100 billion won range for the first time in ten quarters. Since the appointment of CEO Park Sangshin in July last year, profitability has been recovering rapidly.
On July 31, DL E&C announced that its preliminary consolidated results for the second quarter showed sales of 1.9914 trillion won and operating profit of 126.2 billion won. This figure is an "earnings surprise," surpassing the market consensus of 105.7 billion won compiled by financial data provider FnGuide by 19.4%. Operating profit surged by 287.5% compared to the same period last year, and for the first time since the fourth quarter of 2022 (operating profit of 120.2 billion won), quarterly operating profit exceeded the 100 billion won mark.
The dramatic improvement in performance is underpinned by a downward stabilization of the cost ratio. The consolidated cost ratio for the second quarter was 87.3%, the lowest level in three years since the second quarter of 2022 (87.2%). In particular, the cost ratio in the housing business segment improved by 5.8 percentage points, from 93.0% in the same period last year to 87.2%, driving overall profitability. As a result, DL E&C has achieved a cost ratio below 90% for four consecutive quarters since the third quarter of last year.
The company’s financial stability, which is considered among the best in the industry, has also remained unchanged. As of the end of the second quarter, the consolidated debt ratio stood at only 96.0%. Net cash holdings amounted to 1.0153 trillion won. The company has also maintained the highest credit rating in the construction industry, 'AA- (Stable)', for seven consecutive years since 2019.
DL E&C recorded new orders of 962.6 billion won in the second quarter. The company plans to consistently pursue a selective order strategy focused on projects with secured profitability. A DL E&C representative stated, "Our efforts to overcome the difficult business environment have led to our second quarter results," and added, "Based on thorough risk management and a solid financial structure, we will further accelerate performance improvement in the second half of the year."
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