Domestic construction companies are experiencing mixed results in their overseas operations. While existing overseas projects supported performance in the first half of the year, the ability to secure large contracts for nuclear power, liquefied natural gas (LNG), and data centers in the second half is expected to determine results for next year.
According to the Korea Construction Industry Institute on August 11, the total value of overseas construction orders for the year is projected to reach between $27.57 billion and $30.24 billion. Given that domestic construction companies secured $11.281 billion in overseas orders in the first half, they will need to secure an additional $16.29 billion to $18.96 billion in the second half, representing an increase of at least 44% compared to the first half.
In the first half, Hyundai Engineering & Construction led with overseas orders totaling $3.514 billion, largely due to securing major projects like an electric steel mill in the United States. The company plans to expand its overseas operations in the second half by pursuing large nuclear power projects, small modular reactors (SMRs), solar energy, and data centers. The Kozloduy nuclear power plant in Bulgaria has already entered the design phase, and its transition to an EPC contract is seen as a pivotal moment for expanding large nuclear projects.
Samsung C&T has seen significant revenue from existing overseas projects. While it has secured new contracts for a semiconductor plant in Xi'an, China, and a data center in Malaysia, revenue recognition from ongoing projects has contributed to its performance. The company cited the ramp-up of high-tech construction and favorable progress in overseas plant projects as key factors for its improved results. In the second half, it plans to expand new orders in Southeast Asia, including data centers, SMRs, and renewable energy projects.
Daewoo Engineering & Construction's overseas order backlog could change significantly depending on the outcome of large LNG project contracts in the second half. With increased prospects for securing major projects like the Papua New Guinea LNG and Mozambique's Rovuma LNG, the company has raised its overall new order target for the year from 18 trillion won to 27 trillion won, a 50% increase.
GS Engineering & Construction reported an overseas order backlog of 24.9 trillion won at the end of the first half, accounting for about 33% of its total backlog of 75.3954 trillion won, indicating a solid existing overseas pipeline. The contract amounts for projects like the Singapore rail and tunnel have increased, leading to a slight rise in backlog compared to the end of last year. However, new orders for plants and infrastructure have decreased by 80.9% and 56.2%, respectively, compared to the same period last year, leaving the pursuit of follow-up plant and infrastructure orders as a challenge for the second half.
DL E&C has a relatively greater need to supplement its overseas workload. The company has extensive experience in EPC for various power plants both domestically and internationally and is currently engaged in a local project in the U.S. The synergy with DL Energy, which has experience in power project development, investment, and operation in the U.S., is also anticipated.
The second half is expected to see a competitive race among construction companies for overseas orders in North America and the Pacific. In the first half, orders from the Middle East, a traditional overseas construction stronghold, plummeted to $1.272 billion, a 77.2% decrease compared to the same period last year. In contrast, the North America and Pacific region saw a 165% increase to $7.246 billion, accounting for 64.2% of total orders.
A representative from one construction company noted, “By sector, industrial facilities (plants) accounted for $8.474 billion, or 75.1% of total orders,” adding, “There is a noticeable shift in the focus of overseas orders from oil and gas plants centered in the Middle East to manufacturing facilities, LNG, and nuclear power in North America.”
* This article has been translated by AI.
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