DL E&C significantly improved its operating profit in the second quarter of this year. This is due to the stable reduction in the cost ratio of dwellings.
DL E&C reported on the 31st that its consolidated operating profit for the second quarter of this year reached 126.2 billion won. This is an increase of 287.5% compared to the same period last year. The operating profit margin also rose by 4.7 percentage points.
It is the first time since the fourth quarter of 2022 that DL E&C's operating profit has reached the 100 billion won level.
However, during the same period, sales decreased by 3.81% to 1.9914 trillion won. The net profit also plummeted by 79.6% to 8.3 billion won.
The improvement in DL E&C's operating profit is due to the decline in the cost ratio indicator. The company's consolidated cost ratio for the second quarter is 87.3%. It achieved a cost ratio of less than 90% for four consecutive quarters since the third quarter of last year. This is the lowest level in the last three years since the second quarter of 2022, which was 87.2%.
In particular, the cost ratio in the dwellings sector recorded 87.2%, a decrease of 5.8 percentage points compared to 93.0% in the same period last year, contributing the most to the overall improvement in profitability. The cost ratio for the plant sector also slightly decreased from 85.4% in the same period last year to 84.8%. The cost ratio for the civil engineering sector remained the same at 91.2%.
A representative of DL E&C noted regarding the improvement in the cost ratio, "Efficient business management and risk response were effective even amid the overall decline in industry profitability and an uncertain business environment."
DL E&C also demonstrated solid financial stability. As of the end of the second quarter, its consolidated debt ratio was 96.0%, and its reliance on borrowing funds was 10.6%. Cash and cash equivalents amounted to 2.496 trillion won, with net cash totaling 1.0153 trillion won. The company's credit rating has maintained the highest level in the construction industry, 'AA- (stable)', for seven consecutive years since 2019.
New orders recorded 962.6 billion won on a consolidated basis. As of the end of the second quarter, the order backlog stood at 28.8024 trillion won.
A representative of DL E&C said, "Although economic recession and domestic and external uncertainties are rising, efforts to overcome the difficult market have resulted in the second-quarter performance," adding that "based on thorough risk management and a solid financial structure, we will continue to secure high-quality new orders with guaranteed profitability and further intensify our performance improvement in the second half of the year."