Samsung C&T, Hyundai E&C see higher profits in 2023 on overseas projects

Samsung C&T Corp.'s construction unit and Hyundai Engineering & Construction Co. stood out with increased profits last year on overseas projects, while other leading construction firms in South Korea saw their profits shrink on elevated rates and rising labor costs amid the downturn in the domestic property market.

The construction division of Samsung C&T posted 1 trillion won ($780.4 million) in operating profit for 2023, up 18.2% on-year on a consolidated basis. It logged 19.3 trillion won in revenue, up 32.3% from a year earlier, according to its preliminary report on Wednesday.

Samsung C&T’s earnings benefitted from large deals from overseas, such as building $595 million worth of solar power plants in Qatar and a 1.3 trillion won mountain tunnel construction contract for Saudi Arabia's Neom megacity project.

As of end-2023, the construction unit’s overseas order backlog reached 15.1 trillion won, 20.3% more than such orders for domestic projects.

Hyundai E&C logged 785.4 billion won in operating profit for the last year, up 36.6% on-year, and 29.7 trillion won in revenue, up 39.6% from a year earlier.

Last year, the firm won a $5 billion deal for the construction of an ethylene plant and utility infrastructure at the Amiral Petrochemical Complex, which will be the largest petrochemical complex in Saudi Arabia. Hyundai E&C also bagged around 2.4 trillion won from Saudi Arabian Oil Co.'s Shaheen project to manufacture petrochemical products.

Hyundai E&C’s order backlog from overseas was 12.9 trillion won as of end-2023; orders for domestic projects reached 19.6 trillion won.

Other leading builders in Korea, Daewoo Engineering & Construction Co., POSCO Eco & Challenge Co. and DL E&C Co., saw their profits drop last year amid a slowdown in the domestic real estate market.

Daewoo E&C’s operating profit declined 12.8% to 662.5 billion won last year. It had a 110 billion won loss from unsold units of new apartments.

DL E&C posted a 331.2 billion won profit last year, down 33.4% on-year. POSCO E&C’s profit fell 35% to 201 billion won.

Samsung C&T expects about 18 trillion won worth of orders this year, down 6.3% from last year. It aims to receive 3.4 trillion won worth of orders for housing, 3.8 times that of last year based on urban maintenance and redevelopment projects.

Hyundai E&C looks to receive 29 trillion won worth of orders this year.

Write to Jin-Woo Park at jwp@hankyung.com


Jihyun Kim edited this article.