Seoul: Hyundai Engineering and Construction (E and C) Co. announced a 20 percent decline in its first-quarter net profit compared to the previous year, attributing the decrease primarily to higher construction costs, even though the results surpassed market expectations.
According to Yonhap News Agency, Hyundai E and C's net profit for the January-March period stood at 166.7 billion won (US$116 million) on a consolidated basis, down from 208.4 billion won in the same period last year. The company's operating profit saw a decline of 14.8 percent, falling to 213.7 billion won, while sales dropped by 12.8 percent to 7.45 trillion won.
Despite the year-on-year decrease, Hyundai E and C's net profit exceeded the market consensus of 119.7 billion won, as compiled by Yonhap Infomax, the financial data division of Yonhap News Agency. The company reported that its operating profit turned positive from the previous quarter and anticipates a gradual recovery in profitability in the coming periods. This optimism is attributed to the completion of construction projects initiated during the high-cost period and the acceleration of progress in high-margin projects.
In the first three months of the year, Hyundai E and C secured new orders worth 9.4 trillion won, achieving 30.3 percent of its annual target. The company's order backlog was reported at 98.15 trillion won as of the end of March. Hyundai E and C plans to utilize its technological capabilities to secure high-value contracts and expand its business portfolio into energy transition projects, such as nuclear power and data centers.