DL E&C’s sales for the first half rose by 3.7% year on year
DATE 2024.08.01
VIEW 195
DL E&C’s sales for the first half rose by 3.7% year on year
DL E&C performance graphics
DL E&C performance graphics- Sales for the first half reaches KRW3.9608 trillion with an operating profit of KRW93.5 billion
- New construction sites with favorable cost ratio and portfolio diversification will improve profitability.
- New construction sites with favorable cost ratio and portfolio diversification will improve profitability.
- Maintains the highest level of financial stability in the industry with a credit rating of AA- for 6 consecutive years, and cash and cash equivalents of KRW2 trillion
DL E&C announced its provisional results on the 1st that it expects cumulative sales of KRW3.9608, operating profit of KRW93.5 billion in the first half of 2024 on a consolidated basis. Its sales and operating profit for the second quarter are KRW2.0702 and KRW32.6 billion, respectively.
On a consolidated basis, sales in the first half increased by approximately 3.7%, compared to same period of the previous year (KRW3.8206). In particular, sales in the plant business segment increased due to the full-scale implementation of Shaheen Project, and sales of its subsidiary, DL Construction, also increased. DL E&C expects that the growth of the plant business will lead the improvement of performance, which has a relatively favorable cost ratio.
Operating profit for the first half decreased by 42.3% to KRW93.5 billion, compared to the same period of the previous year (KRW162 billion). This decline was largely due to the adjustment to cost ratios and reflection of bad debts at some sites, as a result of reviewing risk factors across all sites of its subsidiary DL Construction, taking into account the prolonged downturn in the housing market. However, DL E&C expects a rebound in operating profit in the second half of the year due to the improved cost ratios, as the housing sites with high cost ratios have been completed, and the proportion of new sites with favorable cost ratios, that started construction since last year, is increasing.
Whereas, DL E&C recorded its debt-to-equity ratio of 103.3%, cash and cash equivalents of KRW2.11 trillion, and net cash holdings of KRW850.5 billion on a consolidated basis as of the end of the 2nd quarter, solidly maintaining the most stable financial structure among Korean construction companies. In particular, despite the liquidity risk faced by construction companies due to the insolvency of real estate project financing, DL E&C was once again recognized for its financial stability, obtaining its credit rating of ‘AA-’, the highest level in the construction industry, from the three major credit rating agencies for 6 consecutive years.
An official from DL E&C said, “We will further improve our net cash holdings and low debt-to-equity ratio in the second half of the year to maintain the industry’s most stable financial structure, as well as, gradually improve our performance, focusing on profitability-oriented substantial management and cost control based on our experience and knowhow on diverse construction.
