Last year, major builders posted mixed report cards depending on when and how much they recognized past losses. Hyundai Engineering & Construction and DL E&C succeeded in improving profitability, while Daewoo Engineering & Construction swung to a loss, showing a polarization of results even among large construction companies.
On the 25th, according to the Financial Supervisory Service's electronic disclosure system and investor relations (IR) materials from each builder, the combined provisional results of nine major construction companies that released last year's provisional figures—Hyundai Engineering & Construction, Hyundai Engineering, DL E&C, POSCO E&C, GS Engineering & Construction, Daewoo Engineering & Construction, HDC Hyundai Development Company, Kolon Global and HLD&I Halla—showed revenue of about 73.8 trillion won and operating profit of about 405.8 billion won.
These builders' revenue last year fell about 9.3% from the previous year (about 81.4 trillion won). This is analyzed as a decline in revenue as new project starts contracted after 2023. Builders posted an operating loss of about 247.9 billion won in 2024 but returned to the black last year. As projects that began during the 2021–2022 period of surging construction costs reached completion, the share of high-cost business sites decreased.
Looking at results by company, Hyundai Engineering & Construction achieved a turnaround last year on a base effect after proactively recognizing losses on large projects in 2024. After posting a separate operating loss of about 215.5 billion won in 2024, it recorded a profit of about 251.2 billion won within a year. The full-scale progress of high-margin overseas plant work, such as the Saudi Jafurah gas processing facilities, appears to have boosted profitability.
Hyundai Engineering also returned to the black, achieving about 264.4 billion won in operating profit on a consolidation basis last year after executing a large-scale loss treatment (big bath) of about 1.2 trillion won in 2024 in its overseas plant segment.
DL E&C expanded profitability through sound management. Last year's operating profit on a consolidation basis was about 387 billion won, up about 42.9% from the previous year (about 270.9 billion won). Tightening risk controls in the dwellings segment and pursuing selective orders is seen to have driven the profitability gains. Its debt ratio also fell from 100.4% at the end of 2024 to 84% at the end of last year, strengthening financial soundness.
GS Engineering & Construction and HDC Hyundai Development Company also lifted profitability. GS Engineering & Construction's operating profit on a consolidation basis last year was about 437.8 billion won, up about 53.1% from a year earlier. While architecture and dwellings segment revenue fell 18.1%, revenue from plant and infrastructure businesses rose 88.1% and 26.7%, respectively, boosting profitability.
HDC Hyundai Development Company recorded 248.6 billion won in operating profit on a consolidation basis last year, up 34.7% from a year earlier. As work progressed in earnest at large self-developed establishments with high added value, such as Seoul One I'Park in Nowon-gu, Seoul, operating profit appears to have increased.
By contrast, Daewoo Engineering & Construction was hit hard by large-scale loss recognition last year. The company posted about 403.1 billion won in operating profit on a consolidation basis in 2024, but swung to a loss last year with an operating loss of 815.4 billion won. This is because it concentrated recognition of losses in last year's results from large overseas projects such as Nigeria LNG Train 7, along with additional expense inputs at high-cost dwellings sites. Its debt ratio also surged from 192.1% in 2024 to 284.5% last year, making financial restructuring urgent.
POSCO E&C also swung to a deficit last year, recording an operating loss of 452 billion won. One-off expenses increased to remediate safety accidents such as on the Sinansan Line, and additional costs were投入 at sites where work was halted due to serious accidents, which served as the main reasons for the swing to a loss.
HLD&I Halla grew 38.9% year over year last year, recording about 80.4 billion won in operating profit on a consolidation basis. This was the result of rigorous cost cuts and improvements in cost ratios at key sites. Kolon Global also returned to the black in a year, posting about 3.9 billion won in operating profit on a consolidation basis last year. A strategy to diversify the revenue structure by lowering dependence on dwellings—such as expanding non-residential orders by more than 1.6 trillion won—proved effective.
The credit rating industry projected that the divergence in builders' results will continue for the time being. Kwon Jun-seong, a senior researcher at NICE Credit Rating, said, "With the business base weakened by fewer new project starts, portfolio composition and liquidity management capabilities will determine corporations' fortunes," adding, "The gap may widen between large companies that secure supply in the greater Seoul area by leveraging strong brands and mid-sized and small builders facing relatively tougher business environments."