News
DL E&C has been assigned the highest credit rating of ‘AA-’ in the construction industry for 6 consecutive years.
DATE 2024.07.02
VIEW 374
DL E&C has been assigned the highest credit rating of ‘AA-’
in the construction industry for 6 consecutive years.
in the construction industry for 6 consecutive years.
Panoramic view of Cariflex, a medical latex plant in Singapore, which was completed by DL E&C in June
- Steadily maintained the highest credit rating in the construction industry since 2019
- DL E&C’s excellent business competitiveness, stable business foundation and outstanding financial stability are recognized.
- DL E&C’s excellent business competitiveness, stable business foundation and outstanding financial stability are recognized.
- DL E&C will enhance corporate value through profitability-focused substantial management and risk management.
DL E&C announced on the 2nd that it has been assigned the highest credit rating of ‘AA- (stable)’ for its corporate bond from the Korea Investors Service, Korea Ratings and NICE Investors Service, which is the highest rating in the construction industry. Accordingly, DL E&C has steadily maintained ‘AA-’ rating for 6 consecutive years since the rating had been assigned since June 2019.
In the rating report, the three major credit rating agencies cited DL E&C’s excellent market position, business competitiveness based on construction experience, stable business foundation supported by a diverse portfolio and abundant order backlog, and financial stability capable of responding to changes in the external environment. They also projected that DL E&C will maintain its current level of financial stability based on stable cash-generating capabilities.
In contrast to the challenging business environment in the construction industry due to the real estate recession and financial crisis caused by PF guarantee, DL E&C is striving for substantial management based on the industry’s highest level of stable financial structure. In the 1st quarter of this year, DL E&C’s various financial indicators demonstrated that the Company’s strong fundamentals to overcome difficult market conditions was unwavering.
Panoramic view of Cariflex, a medical latex plant in Singapore,
which was completed by DL E&C in June
which was completed by DL E&C in June
DL E&C has maintained a positive net cash position since 2021, and held net cash of KRW1.2506 trillion on a consolidated basis in the first quarter of 2024, an increase of KRW189.6 billion compared to the end of last year. It holds cash and cash equivalents of KRW2.432 trillion, and records an operating cash flow of +KRW277.4 billion, showcasing its unrivaled liquidity and financial stability. On the other hands, the Company’s dependence on borrowings was only 13.5% and its debt-to-equity ratio was also 102.3%, the lowest in the industry, as it has continued the rigorous risk management.
Recently, the Company received a letter of support from foreign stockholders with respect to the Company’s excellent financial stability and management direction. In their respective letters, Kopernik Global Investors and Fidelity International Limited, US-based global asset management companies, praised and supported DL E&C’s efforts to put greater emphasis on the Company’s long-term value, and gave favorable comments on DL E&C’s sustainable and strong financial solvency, taking into account DL E&C’s cash reserves and free cash flow. This is in line with the rating opinions of the 3 major credit rating agencies. Foreign stockholders’ ownership percentage in DL E&C increased 29.6% as of May 2024 from 18.6% as of April 2022. It seems that foreign stockholders’ favorable opinion on the Company’s management direction and financial solvency is leading to their actual investment.
An official from DL E&C’s Financial Management Office said, “We will continue to uphold our excellent market position, stable business foundation and outstanding financial stability that have been recognized once again in this credit rating assessment. We will continue to implement profitability-focused substantial management and risk management to overcome the challenges in the construction business environment, as well as to enhance DL E&C’s corporate value.”
