Overseas projects boost Korean builders’ earnings; GS profit cut in half

Domestic construction projects were sluggish amid higher labor and raw materials costs

The Marjan oil refinery construction site in Saudi Arabia (Courtesy of Hyundai E&C)

You-Jung Lee 1

2024-04-30 19:21:32 yjlee@hankyung.com

Earnings

Large-scale overseas construction projects boosted major Korean builders’ quarterly results while lackluster domestic construction work, coupled with higher labor and raw material costs, hurt their profitability, government data showed.

According to the Financial Supervisory Service’s public disclosure system, Hyundai Engineering & Construction Co. and Samsung C&T Corp.'s construction unit posted double-digit growth in their sales and operating profits in the first quarter.

Daewoo Engineering & Construction Co. and GS Engineering & Construction Corp. saw their results significantly worsen in the January-March quarter.

Hyundai E&C posted 250.9 billion won ($181 million) in consolidated operating profit on sales of 8.55 trillion won in the first three months of this year, up 44.6% and 41.7%, respectively, from the year-earlier period.

The company attributed its strong first-quarter results to gains from the Metro Line 3 construction in Panama, the Basra oil refining facility in Iraq and the Jafurah gas facility project in Saudi Arabia.

Founded in 1938, Samsung C&T leads the conglomerate's construction and overseas trading operations

SAMSUNG’S SALES, OPERATING PROFIT AT RECORD HIGH

Samsung C&T’s construction unit saw its sales and operating profit rise to all-time highs.

The company said its operating profit on a consolidated basis reached 337 billion won in the first quarter, up 15.4% from a year earlier, while sales rose 21.4% on-year to 5.58 trillion won.

Samsung said its first-quarter results were boosted by overseas projects.

The company is currently engaged in Qatar's largest solar power generation project, which can supply electricity to about 1.5 million households, and a project in the United Arab Emirates to build an ultra-high voltage direct current transmission system.

Domestic construction projects face rising labor and raw materials costs

Daewoo E&C posted 114.8 billion won in operating profit on sales of 2.49 trillion won in the first quarter, down 35% and 4.6%, respectively, from a year ago.

The company said high interest rates and rising raw material prices hurt its quarterly earnings.

GS E&C posted a quarterly operating profit of 71 billion won on sales of 3.07 trillion won, down 55.3% and 12.6%, respectively, from a year earlier.

Write to You-Jung Lee at yjlee@hankyung.com

In-Soo Nam edited this article.