Daewoo E&C Reports 182.6% Jump in Q2 Operating Profit Amid Improving Margins
Key Takeaways
- •Daewoo E&C's second-quarter operating profit surged 182.6 percent year-on-year to 232.3 billion won, while net profit swung to 167.2 billion won from a loss in the same period last year.
- •The company's operating margin more than doubled from 5.4 percent to 12.2 percent, reflecting significant profitability gains despite a 10.1 percent revenue decline for the quarter.
- •First-half new orders climbed 22.4 percent to 7.13 trillion won, bringing the total order backlog to 53.40 trillion won, equivalent to roughly 6.6 times annual revenue.
- •Daewoo E&C raised its annual new order guidance by 50 percent to 27 trillion won, citing expected large-scale LNG project wins in Papua New Guinea and Mozambique.
- •The company plans to diversify into higher-value segments including nuclear power, LNG infrastructure, overseas urban development, and data centers through a partnership with KINX.
Daewoo Engineering & Construction, one of South Korea's major construction firms, announced Tuesday that its second-quarter operating profit nearly tripled year-on-year, driven by a lower cost ratio and stronger margins in its building segment.
The company posted operating profit of 232.3 billion won ($163 million) for the April–June period, representing a 182.6 percent increase from a year earlier. Net profit swung to 167.2 billion won, recovering from a loss recorded in the same quarter last year. Revenue declined 10.1 percent to 2.04 trillion won.
For the first half of the year, cumulative revenue reached 3.99 trillion won, down 8.2 percent on-year. Operating profit rose 109 percent to 487.9 billion won, while net profit surged to 363 billion won from 15 billion won a year earlier.
First-half revenue by segment was broken down as follows: 2.67 trillion won from housing and building construction, 743.3 billion won from civil engineering, 511.5 billion won from plant construction, and 74.5 billion won from other businesses.
"Revenue eased slightly as fewer project sites were active, but a stabilizing cost ratio and stronger building-segment profitability pushed operating profit sharply higher," a Daewoo E&C official said. "The operating margin more than doubled, from 5.4 percent to 12.2 percent, marking a substantial improvement in profitability."
New orders for the first half climbed 22.4 percent on-year to 7.13 trillion won, led by domestic building projects. The company's order backlog stood at 53.40 trillion won, equivalent to approximately 6.6 times its annual revenue, providing multi-year revenue visibility.
Daewoo E&C said it plans to leverage its expertise in nuclear power and liquefied natural gas (LNG) to expand both domestically and internationally, while diversifying into higher-value segments such as overseas urban development, data centers, and domestic redevelopment projects. The strategic push into energy infrastructure aligns with a broader trend among Korean construction firms pursuing overseas plant and LNG projects as a key growth engine.
"With large-scale LNG project wins in Papua New Guinea and Mozambique coming into view, we raised our new order target," the official said. The company increased its annual new order guidance to 27 trillion won, up from the 18 trillion won target set earlier this year — a 50 percent increase reflecting growing confidence in its overseas project pipeline.
In related developments, Daewoo E&C has been pursuing a larger presence in Indonesia, recently completed its Ulsan LNG terminal project, and is exploring a full-cycle data center business through a partnership with KINX, tapping into rising global demand for digital infrastructure.