Lotte Engineering has more than doubled its cumulative operating profit for the third quarter of this year compared to the same period last year, thanks to strengthened cost management and selective bidding. The company also reported a decrease in its debt ratio and project financing (PF) contingent liabilities, indicating improved financial soundness.
According to the Financial Supervisory Service's electronic disclosure system on November 13, Lotte Engineering's consolidated revenue for the third quarter was 1.4761 trillion won, with an operating profit of 349 billion won. The cumulative operating profit for the third quarter reached 207.7 billion won, a 126% increase from the previous year.
The improvement in profitability was influenced by a decline in the cost of sales ratio. The cumulative cost of sales ratio for the third quarter was 89.5%, down 4.1 percentage points from 93.6% in the same period last year. The quarterly cost ratios also decreased from 91.7% in the first quarter to 88.8% in the second quarter, and 88.0% in the third quarter. Lotte Engineering attributed the improvement in cost ratios to selective bidding focused on high-quality projects and enhanced process management at construction sites.
Financial indicators also showed improvement. At the end of the third quarter, the debt ratio was 166.3%, down 20.4 percentage points from 186.7% at the end of last year. PF contingent liabilities decreased by approximately 850 billion won, from about 32 trillion won to around 23 trillion won during the same period. Lotte Engineering plans to reduce this figure to approximately 21 trillion won by the end of the year.
The company expects to recover construction receivables as major housing projects are completed and occupied next year. With over 20 projects scheduled for completion and occupancy next year, Lotte Engineering anticipates improved cash flow from operating activities due to the influx of final payments.
Orders for urban redevelopment projects have also increased. The cumulative order amount for this year reached 4.011 trillion won, surpassing last year's total of 3.3668 trillion won. Key projects include the redevelopment of the Seongsu Strategic Maintenance Zone District 4 (1.3492 trillion won), the redevelopment of the Kumho 21 District (624.2 billion won), the reconstruction of the Garak Geukdong Apartments (484 billion won), and the reconstruction of the Dogok Woosung Apartments (400.2 billion won).
A Lotte Engineering official stated, "The focus on profitability-centered business operations is yielding tangible results. We will secure future competitiveness based on our strategy of selective bidding for quality projects and a stable financial structure."
* This article has been translated by AI.
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