DL E&C disclosed its provisional earnings on the 31st that it expects cumulative sales of KRW5.8796 trillion and operating profit of KRW176.8 billion for Q3 2024 on a consolidated basis. Of these, sales for Q3 amounted to KRW 1.9189 trillion, 4.4% increase compared to the previous year (KRW1.8374 trillion), and operating profit for Q3 amounted to KRW83.3 billion, 3.7% increase compared to the previous year (KRW80.4 billion). In particular, contrary to market expectations of a year-on-year decrease in operating profit, the increase in Q3 operating profit seems to have started a full-scale trend of performance improvement. 

 

Winning new orders in the third quarter amounted to KRW2.9134 trillion, a 43.1% year-on-year decrease (last year: KRW5.1232 trillion). However, this is due to the base effect of a large-scale track record on winning orders for Baekhyun MICE Urban Development Project worth approximately KRW2.4 trillion in the third quarter of last year. Excluding this, new orders grew by over 6% year-on-year. DL E&C has focused on building a balanced business portfolio, selectively winning orders for high-profit projects, and thereby pursuing a strategy to overcome difficult business environment. 

 

In early July, the Housing Business Division was selected as the builder for the ‘housing reconstruction and refurbishment project for the 4th Jamsil Woosung Apartment Complex’ worth KRW381.7 billion, winning its first order for urban refurbishment project this year. Subsequently in late August, it was selected as the builder for the reconstruction and refurbishment project for Dogok-Gaepo Hanshin Apartment Complex worth KRW438.5 billion, marking consecutive achievement in Gangnam area of Seoul. In October, it was selected as the builder for the reconstruction project for the 7th district in Jayang-dong worth KRW360.7 billion, surpassing KRW1 trillion in winning orders for urban refurbishment projects this year. DL E&C also aims to actively pursue winning orders for major urban refurbishment projects in Seoul, including 5th district in Hannam-dong. 

 

The Civil Engineering Division also won an order for the construction of the Yeongdong Pumped Storage Power Plant worth KRW481.8 billion in August, demonstrating its leadership in the domestic hydroelectric and dam construction sectors. The Plant Business Division also won an order for the Modernization Project for Block 1 of Bundang Combined Cycle Power Plant worth KRW254.6 billion in October, and is planning to win additional orders worth KRW2 billion by the end of this year. In addition, as DL E&C’s partner company, a U.S.-based company X-Energy, which is pushing forward a future growth engine of SMR (small modular reactor) business, entered into a large-scale investment contract with the global big tech company Amazon, DL E&C’s rapid progress in the SMR market is anticipated. 

 

Going over the profitability indicators, DL E&C’s cost ratio in the 3rd quarter recorded 87.8%, which was improved by 2.4% points compared to the previous quarter, and its wholly-owned subsidiary DL Construction also recorded 92.2%, which was improved by 3.4% points compared to the previous quarter, showing a clear improvement trend.

 

As of the end of the 3rd quarter, DL E&C’s debt-to-equity ratio stood at 104.2% on a consolidated basis, with cash and cash equivalent of KRW2.2366 trillion and net cash of KRW1.308 trillion, maintaining the most stable financial structure among domestic construction companies.

 

An official from DL E&C commented, “The construction company is facing a very difficult year due to the prolonged real estate downturn and deterioration in profitability. We will continue to secure high-quality profitable orders based on rigorous risk management and robust financial structure, and realize gradual performance improvement in the future.”