Kumho Engineering & Construction reports third-quarter operating profit of 22.2 billion won, up 44.2% year on year

[Financial News] Kumho Engineering & Construction posted operating profit of 22.2 billion won in the third quarter of this year, up 44.2% from the same period a year earlier. Profitability improved as its cost ratio fell, while cumulative new orders also surpassed the annual target.
Kumho Engineering & Construction said in an earnings release on the 12th that it recorded consolidated revenue of 494.5 billion won, operating profit of 22.2 billion won and net profit of 12.4 billion won in the third quarter. Revenue fell 5.5% from the same period a year earlier, while net profit rose 61%.
The cost of sales as a share of revenue fell 1.8 percentage points, from 93.7% in the third quarter of last year to 91.9% this year. Over the same period, the operating margin rose 1.6 percentage points, from 2.9% to 4.5%.
Cumulative new orders in the first three quarters totaled 2.8481 trillion won, up 91.5% from 1.4871 trillion won in the same period a year earlier. This exceeded the full-year target of 2.7 trillion won. By segment, orders rose 180% to 1.2799 trillion won in building construction, 60% to 927.8 billion won in housing, and 42% to 640.4 billion won in civil engineering.
It won contracts worth 1.4078 trillion won in Korea Land and Housing Corporation (LH) public housing projects involving private-sector participation. It also added to its order wins through projects including Busan Eco Delta City Block 8, Namyangju-si Wangsuk 2 Block A-1, the Jangji Bus Depot multi-level development project, and Samsung Electronics Co., Ltd.'s Plact plant in Korea.
At the end of the third quarter, the order backlog stood at 10.1963 trillion won, up 906.9 billion won (9.8%) from the end of last year. That is about five times the company's annual revenue last year. By segment, the backlog comprised 3.0382 trillion won in building construction, 4.6459 trillion won in housing, 2.3924 trillion won in civil engineering and 119.8 billion won overseas.
The consolidated debt ratio was 337.2%, down 68.3 percentage points from 405.5% at the end of the previous quarter. It was 183.0 percentage points lower than the 520.2% recorded at the end of last year. Kumho Engineering & Construction expected the ratio to fall further once the perpetual convertible bonds it issued last month are reflected in equity in the fourth quarter.
A Kumho Engineering & Construction representative said, “We are seeing positive results across key management indicators, including a recovery in profitability through an improved cost ratio and an expansion in new orders. Building on our strong order backlog, we will maintain a stable business foundation and sustain the improvement in profitability.”
[email protected] Choi Ga-young Reporter