News
DL E&C announced ‘its performance in 2023 and 3-year policy to return to stockholders’.
DATE 2024.02.01
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DL E&C announced ‘its performance in 2023 and 3-year policy to return to stockholders’.
Achieved KRW7.9945 trillion in gross sales, and KRW14.8894 trillion in wining new ordersAnnounced new policy to return to stockholders (Total return rate to stockholders increased from 15% to 25%.)
- Achieved a 25% increase in winning new orders compared to the previous year, exceeding the target by more than KRW billion
- Consolidated revenue increased by 7%, compared to the previous year.
- Target in 2024: gross sales of KRW8.9 trillion (11% year-on-year increase), operating profit of KRW520 billion (57% year-on-year increase
- Resolved to retire 2,939,077 treasury stocks of common stocks held by the Company (7.6% of total stocks issued)
DL E&C announced through a disclosure of provisional performance on February 01 that it expects annual gross sales of KRW7.9945 trillion and operating profit of KRW331.2 billion in 2023 on a consolidated basis. Annual gross sales in 2023 recorded a 6.6% year-on-year increase. Last year, winning new orders on a consolidated basis recorded KRW14.8894 trillion, a 25.2% increase from 2022, exceeding the annual target of KRW14.4 trillion by more than KRW400 billion.
Especially, winning orders for the civil engineering and plant business have significantly increased based on its differentiated technologies such as specialized design. The civil engineering business achieved a remarkable performance of KRW1.429 trillion, a year-on-year increase of 142.5%, including winning orders for the Namhae-Yeosu submarine tunnel by means of creative design differentiation. The plant business recorded outstanding results of KRW3.4606 with a 98.2% increase, as it won an order for Shaheen Project, which requires advanced technology and experience in project implementation. This success was attributed to the Company’s agile adjustments to its business portfolio in response to the severe downturn in the housing market.
The housing business also improved its wining orders compared to the previous year. The Company achieved in obtaining orders of KRW6.7192 trillion with a6.2% increase, including wining orders for Baekhyun MICE urban development project worth KRW2.3881 in the 3rd quarter of last year. And the subsidiary DL Construction recorded its gross sales of KRW3.2806, a 1.5% year-on-year increase.
Operating profit decreased by 33.4% compared to the previous year due to the aftereffect of the surge in construction material prices. However, despite the continued difficult market environment, the Company expect that the profitability will be improved in earnest from this year as quarterly operating profit has been increasing for 3 consecutive quarters from Q2 to Q4 from a low point in Q1 of last year.
DL E&C, which is assessed to have the most stable financial structure out of major construction companies, is maintaining its unrivaled financial stability, recording KRW1.1 trillion in net cash and a debt-to-equity ratio of 97.2% on the consolidated basis as of the end of last year. Recently, the credit ratings of the construction companies have been adjusted due to the risks caused by PF guarantee on real estate, but DL E&C is firmly maintaining its ‘AA-’ credit rating, the highest amount major construction companies.
DL E&C set annual goals in 2024 on a consolidated basis, including gross sales of KRW8.9 trillion, operating profit of KRW520 billion and winning new orders of KRW11.6 trillion. The sales target of KRW8.9 trillion is about KRW1 trillion higher than sales in last year, which achieved the highest performance since the spinoff in 2021.
The operating profit target of KRW520 billion also increased by more than 57% compared to performance in last year (KRW331.2 billion). Even in the face of a severe slump in the domestic construction market and a surge in construction material prices caused by global inflation, the Company expects the full-fledged improvement in profitability based on its industry’s top-level cost management capabilities.
Meanwhile, DL E&C held a board meeting on this day and resolved to retire 2,939,077 treasury stocks of common stocks, representing 7.6% of the total number of the issued stocks. This is a proactive measure to protect stockholders’ interests by preemptively retiring the number of new stocks to be issued for all-inclusive exchange of stocks with its subsidiary DL Construction.
Furthermore, DL E&C announced a new policy for returning to stockholders that will utilize 25% of net profit on a consolidated basis for return to stockholders over the next three years from 2024 to 2026. The stockholder return rate of 25% consists of cash dividends (10%) and purchase of treasury stocks (15%), making a 10% point- improvement from the existing 15% stockholder return policy.
An official from DL E&C said, “Although the overall business environment of construction industry continues to be difficult, we will focus on selecting and wining orders for high-quality projects with high profitability. We will continue to increase sales and profits, utilizing our experience and knowhow in various construction works based on our stable financial structure compared to other construction companies, as well as leading the industry in terms of returning to stockholders.
