Daewoo E&C sales rose nearly 19% in Q3 amid modest drop in operating profit

Daewoo E&C’s headquarters in Euljiro, Seoul. [Courtesy of Daewoo E&C]

Daewoo Engineering & Construction Co. announced on Friday that its operating profit for the third quarter fell by 7.4 percent on quarter to 190.2 billion won. ($140 million)

The figure, however, was 8.4 percent higher than the market consensus compiled by Yonhap Infomax, a financial news and data-providing company.

The construction company saw its third-quarter sales grow by 18.6 percent from a year ago to 2.9 trillion won. The net profit fell by 36.9 percent to 109.9 billion won during the same period.

Sales during the first three quarters of 2023 rose by 23 percent on year to hit 8.86 trillion won, accounting for 81.4 percent of the annual target.

The sales stood at 5.56 trillion won for the residential building business, 1.77 trillion won for civil engineering, and 1.22 trillion won for plants.

“Although high interest rates and rising prices of construction materials increased the pressure on our residential construction projects, the robust performance in civil engineering and plant business contributed to the increased sales and better-than-expected operating profit,” an unnamed official from the construction company said.

“We expect expansion in our non-residential projects to be sustained, driven by ongoing revenue generated from existing major projects and the expected contributions from upcoming ones.”

The order values recorded during the first three quarters of 2023 amounted to 9.01 trillion won, approximately 73.3 percent of the target.

The company’s order backlog as of the end of the third quarter stood at 45.5 trillion won, the equivalent of 4.4 years of revenue.

“Follow-up contracts are expected as we seek to make inroads into major countries,” the official added.