Daewoo Engineering is experiencing a surge of over 12% after reporting second-quarter results that exceeded market expectations.
According to the Korea Exchange, as of 2:34 PM, Daewoo Engineering shares were trading at 14,960 won, up 1,660 won (12.48%) from the previous trading day.
The company announced that its consolidated operating profit for the second quarter of this year reached 232.3 billion won, a 182.6% increase compared to the same period last year. This figure surpasses the market forecast of 162.6 billion won by 42.9%.
During the same period, sales decreased by 10.1% to 2.0435 trillion won, but net profit turned positive at 167.2 billion won. The company explained that while revenue declined due to a reduction in ongoing projects, the stabilization of cost rates and improved profitability in the construction division significantly boosted operating profit.
In the first half of the year, new orders totaled 7.1285 trillion won, a 22.4% increase compared to the same period last year, with a backlog of 53.4019 trillion won. As a result, the annual new order target has been raised from 18 trillion won to 27 trillion won.
Jang Mun-jun, a researcher at KB Securities, noted, "The second-quarter operating profit exceeded market consensus by 38.8%, and the cumulative gross profit margin (GPM) for the construction sector reached 21.2%, indicating a significant improvement in profitability."
He added, "The visibility of contracts for five projects in the pipeline, including the Dukovany nuclear power plant, a fertilizer plant in Nigeria, Mozambique LNG, Papua New Guinea LNG CPF, and the Gadeokdo new airport, has increased for the second half of the year, prompting us to raise the new order guidance from 18 trillion won to 27 trillion won."
Furthermore, he mentioned that the plant sector is expected to see margin normalization starting in the second half, and the business in Vietnam could significantly contribute to both scale and profits after 2027.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.