"Overseas Recovery, Domestic Profitability": POSCO E&C Focuses on Core Management After Multi-Billion Won Losses

Overseas Order Ranking Jumps from 24th to 9th with 1 Trillion Won LNG Project in Thailand
First Simultaneous Achievement of 1 Trillion Won in Overseas Orders and Top 10 Ranking in Four Years Since 2021
Accumulated Operating Loss of 261.6 Billion Won by Q3 Last Year... Laying the Groundwork to Move Beyond “Domestic-Only Construction Company” Amid Credit Rating Crisis
Opting Out of Gadeokdo New Airport... Focusing on High-Yield Domestic Redevelopment Projects for Profitability
"Strengthening Core Operations with Safety as the Top Priority"

POSCO E&C is accelerating structural improvements with a dual focus on recovering its overseas business and strengthening its domestic operations. Last year, POSCO E&C achieved a significant milestone by rejoining both the “1 Trillion Won Club” for overseas orders and the “Top 10 Order-Taking Companies” for the first time in four years. Domestically, the company is overcoming large-scale operating losses and the threat of a credit rating downgrade by employing a “selective profitability strategy,” concentrating on high-yield, proven projects instead of high-risk ventures.

1 Trillion Won Contract in Thailand... Overseas Order Ranking Jumps from 24th to 9th

POSCO E&C's Incheon Songdo Office. POSCO E&C.

According to the Overseas Construction Integrated Information Service of the International Contractors Association of Korea on January 13, POSCO E&C’s overseas orders last year totaled 810.19 million dollars (approximately 1.2 trillion won), ranking ninth in the industry. This is a sixfold increase from the previous year, when overseas orders amounted to 128.06 million dollars (about 190 billion won), dropping the company to 24th place. Achieving both 1 trillion won in overseas orders and a top 10 ranking marks the first time since 2021 (994.21 million dollars, 9th place) that POSCO E&C has reached this milestone in four years. From 2022 to 2024, the company did not surpass 400 million dollars in annual overseas orders and remained outside the top 10.

This turnaround is the result of meticulous organizational restructuring. Last year, POSCO E&C established the “Overseas Business Task Force” to secure future growth engines, consolidating overseas project functions that had been dispersed across various divisions and building an integrated management system. In fact, during 2022 and 2023, the company maintained a highly conservative stance, participating only in captive projects within its affiliates for risk management, with no external bidding. However, after strengthening its internal review system, POSCO E&C resumed active participation in external bids starting in 2024.

The result of these efforts was the “Map Ta Phut (MTP) LNG Terminal” project in Thailand, secured in June last year. As Thailand’s first public-private partnership LNG terminal, the project is a large-scale endeavor with a contract value of 738 million dollars (about 1.08 trillion won). In the past, POSCO E&C had established itself as a major overseas player with projects such as the 2011 Brazil steel plant order (about 5 trillion won) and the 2015 investment from Saudi Arabia’s Public Investment Fund (about 1.2 trillion won). However, by the third quarter of last year, the company’s overseas revenue ratio had shrunk to just 6.1 percent, signaling a fall to a “domestic-only construction company.” The Thailand project served as a turning point, signaling a reversal of this trend. This year, POSCO E&C is targeting overseas business expansion in Southeast Asian markets such as Vietnam and Thailand, as well as in the Middle East (Saudi Arabia) and Eastern Europe (Poland).

Pragmatic Management Amid Credit Rating Crisis... Focusing on High-Yield Domestic Redevelopment Projects

Last year, POSCO E&C recorded an operating loss of 261.6 billion won in the first three quarters due to a series of fatal accidents and the cost of restoring the Shinansan Line accident. Considering the yet-to-be-announced fourth quarter results, the company is expected to post an annual deficit exceeding 400 billion won, putting it at risk of a credit rating downgrade. Although POSCO E&C narrowly avoided a downgrade in year-end evaluations by major credit rating agencies, its outlook was revised from “stable” to “negative.”

Having averted the worst-case scenario, POSCO E&C is now taking a thoroughly pragmatic approach to its domestic business. A prime example is its recent decision not to participate in the highly symbolic but high-risk construction of the new Gadeokdo Airport. Instead, the company is focusing its efforts on high-yield redevelopment projects. Last year, POSCO E&C secured seven such projects, including the Isu Geukdong and Useong remodeling (1.9796 trillion won) and the Seongnam Eunhaeng Jugong Apartment reconstruction (1.2979 trillion won), achieving the fourth-highest redevelopment order volume in the industry (5.9623 trillion won). This year, the company is expected to compete for key projects such as the Gaepo Useong 4th reconstruction and the Seongsu 2nd district redevelopment.

A POSCO E&C official stated, “The decision not to participate in the Gadeokdo New Airport construction project was made because successfully executing major ongoing infrastructure projects such as the Shinansan Line and the Greater Seoul Metropolitan Express Railway (GTX)-B is our top priority.” The official added, “With safety as our foremost principle, we will continue to strengthen our core by focusing on large-scale overseas projects and high-yield domestic ventures.”