On June 25, DL E&C announced that it retained the 'AA-' rating in NICE's regular credit rating assessment. The company has held the same credit rating since 2019.
NICE cited the company's diversified business portfolio, strong competitive edge, and stable operational foundation as key reasons for maintaining the rating. The recovery in profitability due to improved cost ratios in the housing sector, along with stable cash generation and excellent financial stability, were also positively evaluated.
Regarding the recent corporate tax notification from Saudi Arabia's tax authorities, NICE assessed that the short- to medium-term impact would be limited. The evaluation reflects that there are currently no ongoing projects in Saudi Arabia and that the company plans to contest the tax assessment without making any payments.
DL E&C's financial structure remains among the best in the industry. The company's average free cash flow over the past five years was 262.9 billion won, with net cash totaling 1.28 trillion won and a debt ratio of 87.5% as of the end of the first quarter of this year. NICE forecasts that the company will continue to generate solid cash flow based on its strong sales performance and stable business structure.
Profitability is also on the rise. As the share of projects started during a period of soaring construction costs decreases and the cost ratios in the housing sector improve, the consolidated operating profit for the first quarter of this year reached 157.4 billion won, a 94.3% increase compared to the same period last year. The operating profit margin rose by 4.6 percentage points to 9.1%, while net profit surged to 160.1 billion won, up 429.5%.
A financial management official at DL E&C stated, "This credit rating assessment has once again recognized our excellent business competitiveness, stable operational foundation, and top-tier financial stability in the industry. We will continue to improve our performance and enhance corporate value through profitability-focused management and thorough risk management."
Meanwhile, DL E&C has recently received a notification from Saudi Arabia's tax authorities regarding an approximately 853.3 billion won corporate tax reassessment and has initiated a contesting process. However, analysts believe that the short-term financial impact, as well as the long-term effects on the company's fundamentals, will be limited.
* This article has been translated by AI.
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