Daewoo E&C outperforms market expectations with focus on fundamentals

Daewoo E&C CEO Kim Bo-hyun, second from right, talks to company officials at the construction site of a PRUGIO apartment complex near Songnae Station, Bucheon, Gyeonggi Province, April 23. Courtesy of Daewoo E&C

Daewoo Engineering & Construction outperformed market expectations in the first quarter, reflecting its efforts to stabilize profitability through portfolio restructuring and improved cost efficiency.

The builder reported Sunday that its revenue and operating profit for the January–March period reached 2.08 trillion won ($1.49 billion) and 151.3 billion won, respectively. Though sales declined 16.47 percent from 2.49 trillion won a year earlier, operating profit improved 31.8 percent from 114.79 billion won during the same period.

The builder explained that its profitability improved as it secured high-margin orders in the housing construction and plant sectors. New orders reached 2.82 trillion won in the first quarter, up 13.4 percent from a year earlier.

The improvements came after the appointment of the company’s new CEO, Kim Bo-hyun, who has been emphasizing risk management, profitability, cost efficiency and quality as priorities in strengthening the company’s fundamentals since he took office in December.

Based on this strategy, the company said it is accelerating efforts to diversify its order portfolio and improve operational fundamentals. Currently, it is participating in a number of projects, including the undergrounding of Seoul’s Dongbu Expressway and the construction of the GTX-B commuter rail line, scheduled to break ground in June.

The company is also seeing continued progress in urban redevelopment projects. Last year, it was selected as the main contractor for a major reconstruction site in Seoul’s Gangnam area, and this year it is targeting new orders in key districts including Gangnam, Seocho, Yeouido and Apgujeong.

In its overseas business, the company is strengthening its strategy by entering new markets and focusing on new town development. In April, it signed a basic agreement for a mineral fertilizer plant project in Turkmenistan. In Vietnam, it launched land compensation procedures for the Kien Giang New Town development project through a local subsidiary.

“We plan to focus our efforts on strengthening our fundamentals, aiming to achieve a revenue target of 8.4 trillion won this year and continue improvements in profitability,” a company official said.