In the first half of this year's credit rating reviews, only the outlook for Daewoo Engineering & Construction among major large construction companies declined. Analysts said financial burdens have grown as last year's large losses were reflected, and it may take time for cash flow to recover. Looking at both credit ratings and outlooks among the top five builders by the 2025 construction capability evaluation, Daewoo Engineering & Construction is seen as the most likely to face an additional downgrade.
According to the credit rating industry on the 8th, NICE Investors Service in February lowered the long-term credit rating outlook for Daewoo Engineering & Construction from "stable" to "negative." The same outlook was maintained in the main review in June. Among the top five in the 2025 construction capability evaluation—Samsung C&T, Hyundai Engineering & Construction, Daewoo Engineering & Construction, DL E&C, and GS Engineering & Construction—Daewoo Engineering & Construction was the only one whose outlook fell in the first half compared with the end of last year.
NICE Investors Service lowered the outlook for Daewoo Engineering & Construction because it viewed financial soundness as weakened by last year's large losses. On a consolidation basis for 2025, Daewoo Engineering & Construction posted an operating loss of 815.4 billion won, swinging to a deficit. It was the first annual operating loss since 2016. Net loss came to 916.1 billion won.
The losses also worsened financial metrics. Credit rating agencies said the large net loss in 2025 reduced equity, pushing up the debt ratio and borrowing burden. Still, the company returned to the black in the first quarter of this year. On a consolidation basis, Daewoo Engineering & Construction posted first-quarter revenue of 1.9514 trillion won, operating profit of 255.6 billion won, and net profit of 195.8 billion won. However, the debt ratio remains high. As of the end of the first quarter, the debt ratio was 277.7%, up 84.5 percentage points from 193.2% a year earlier.
Yook Sung-hoon, a senior researcher at NICE Investors Service, said, "Construction is a contract-based industry where funds come in at once when large projects are completed, but looking at the status of Daewoo Engineering & Construction's current business sites, there are not many near-completion sites that would allow for large short-term cash inflows."
Korea Ratings also kept Daewoo Engineering & Construction's outlook at "negative" in last month's regular review. Kim Hyeon, a senior researcher at Korea Ratings, said, "Projects that started after construction costs rose are being reflected in revenue, and profitable self-developed projects are increasing, so margins are expected to improve," but added, "However, there remains a possibility of additional losses from nonperforming receivables and the like, so we plan to continue monitoring the situation."
The credit rating industry expects Daewoo Engineering & Construction's cash flow to improve around 2028. That is because the completion of large self-developed business sites such as "Blanc Summit 74" and "Tangjeong Prugio Center Park" could trigger full-scale inflows of proceeds from unit sales.
Blanc Summit 74 is an ultra-high-rise residential complex that Daewoo Engineering & Construction is self-developing in Beomil-dong, Dong-gu, Busan. The company purchased a site formerly used as a Hanjin Express logistics center and is building five basement levels to as high as 69 above-ground floors, with 998 apartment units and 276 officetel units. Move-ins are slated for late 2028. Tangjeong Prugio Center Park is a 1,416-unit apartment complex rising two basement levels to 29 above-ground floors in Block C1 of the Asan Tangjeong Techno General Industrial Complex in Tangjeong-myeon, Asan, South Chungcheong. Move-ins are scheduled for March 2028.
However, the actual profitability of the self-developed business sites remains to be seen. A Daewoo Engineering & Construction official said, "Self-developed business sites often have higher operating margins than general turnkey projects, but margins vary widely by individual site."