DL E&C Reports 2021 Financial Results, Achieving Highest Operating Profit in South Korean Construction Industry


SEOUL, South Korea–()–DL E&C Co., Ltd (KRX: 375500) posted on January 27, 2022 that its tentative results are expected to reach KRW 7.6 trillion and KRW 956.7 billion in consolidated sales and operating profit in 2021, respectively. The annual operating profit, which recorded the largest in the South Korean construction industry, exceeds the management target for 2021 as well as earnings forecasted by the market. The company also recorded 12.5% in the operating profit margin, the highest ratio in the construction industry.

Early last year, DL E&C proposed the management target of KRW 7.8 trillion and KRW 830.0 billion in consolidated sales and operating profit in 2021, respectively. While sales reached 98% of its annual target, its operating profit exceeded the target by KRW 126.7 billion. The company retained steady profitability by getting over unfavorable factors, such as soaring raw materials prices and an increase in personnel expenses, with outstanding revenue structures and cost management capability. The Housing Business Division led the growth of business results based on the expansion of developer business, and Plant Business Division also achieved significantly strong results versus its plan.

In 2021, the company received orders in value of KRW 10.5 trillion. As it obtained orders in value of KRW 5.1 trillion in the fourth quarter alone, the company achieved orders close to the annual target of KRW 11.5 trillion. Notably, the company began to achieve substantial results by obtaining orders in value of some KRW 2.2 trillion from the overseas plant market on which it has been concentrating efforts for years. While it is continuously receiving orders for large projects from overseas markets, Plant Business Division expects to raise additional sales in the area of CCUS (Carbon Capture, Utilization and Storage), one of the new ESG business opportunities for the company.

DL E&C proposed consolidated sales of KRW 8.4 trillion and consolidated operating profit of KRW 900.0 billion in the guidance for the year 2022. The company expects to raise a substantial increase in sales this year driven by Plant Business Division, which received orders for large projects from overseas markets last year, as well as Housing Business Division.

DL E&C announced a new order target of KRW 13.6 trillion in consolidation in 2022, an increase by 30% year-on-year. The company aims to reinforce developer business by exploring green-field sites near Seoul and metropolitan regions, and obtain major urban redevelopment projects, including remodeling projects, by taking advantage of its housing brand power.

Its Civil Engineering Division expects to receive additional orders from Singapore, the Philippines and Indonesia where it is currently conducting projects. And, building on the successful project of the Canakkale Bridge in Turkey, the longest suspension bridge in the world that will be completed soon, the Division plans to grow as a developer that draws attention in the global market.

With the goal of winning contracts for over two front-end engineering and design (FEED) projects this year, the Plant Business Division will continuously seek to receive orders for engineering, procurement and construction (EPC) works in connection with FEED projects. At the same time, it aims to take an advantageous position in the market by strengthening CCUS-related technologies for new businesses and developing diversified business models.

Maintaining a stable financial structure represented by a credit rating of AA-, the highest level in the construction industry in South Korea, a debt-to-equity ratio of DL E&C was improved from 102% in early 2021 to 93% at the end of the year. The company plans to retain the highest operating profit margin in the construction industry by aggressively pushing forward developer business this year based on robust financial and net cash structures.

“Financial results adequately highlight features of an unrivaled company that recorded balanced performance along with favorable profit margin across all business segments, including housing, civil engineering and plant, without being lopsided to the housing business among large construction companies in South Korea,” commented a manager at DL E&C.

DL E&C’s annual target in 2022 in consolidation

Sales

Operating profit

Orders received

KRW 8.4 trillion

KRW 900.0 billion

KRW 13.6 trillion

 



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