About 13,000 housing units pre-sold through Q3

Company expects sales to rebound as projects ramp up

GS Engineering & Construction's headquarters at Gran Seoul in Jongno-gu, Seoul. [GS Engineering & Construction]
GS Engineering & Construction's headquarters at Gran Seoul in Jongno-gu, Seoul. [GS Engineering & Construction]

GS Engineering & Construction said Friday it posted consolidated sales of 2.74 trillion won ($2.06 billion) and operating profit of 95.5 billion won in the third quarter, according to a regulatory disclosure. Sales fell 14.5 percent and operating profit dropped 35.7 percent from the same period a year earlier. Pre-tax profit came in at 51.4 billion won.

The plant division stood out among business segments. With major domestic and overseas projects gaining full momentum, the plant division's sales rose 34.6 percent year-on-year to 457 billion won, up from 339.6 billion won in the same quarter last year. The infrastructure division posted sales of 343.7 billion won.

The architecture and housing division, however, felt the lingering effects of years of reduced supply amid a housing market downturn, with sales falling 18.7 percent from 1.85 trillion won a year earlier to 1.5 trillion won.

The company said it successfully completed pre-sales of about 13,000 units through the first three quarters of this year, and expects the architecture and housing division's sales to return to growth as construction on those projects picks up in earnest.

While earnings declined, the company's order backlog grew substantially. New orders in the third quarter totaled 3.96 trillion won. In the architecture and housing segment, GS Engineering & Construction secured contracts including the Yongsan Munbae-dong mixed-use residential complex, worth 571.7 billion won, and the Namyangju Wangsuk 2 A8 and A12 block public-private project, worth 217.3 billion won. In infrastructure, it won the second Gyeongchun Expressway Section 3 contract, worth 104.2 billion won. Danwood, the company's Polish modular construction subsidiary, also booked 196.2 billion won in new orders.

The company particularly demonstrated its competitiveness in urban redevelopment projects in central Seoul. Through the first three quarters of this year, GS Engineering & Construction secured construction rights for urban renewal projects totaling 5.5 trillion won, including the Seongsu District 1 redevelopment worth 2.15 trillion won, the Songpa Hanyang 2nd reconstruction worth 685.6 billion won, and the Seocho Jinheung reconstruction worth 679.3 billion won. The company was also recently named the preferred negotiating partner for the Mokdong Complex 12 project, valued at 1.79 trillion won, and the Yeouido Eunha and Samik apartment complex, valued at around 1 trillion won — major wins expected to push its order figures even higher.

"We are responding flexibly based on a strategic portfolio focused on our competitive strengths, even as domestic and external uncertainties persist," a company official said. "We will do our utmost to build a solid foundation for future growth."

Meanwhile, GS Engineering & Construction has been stepping up its push into the Australian market, recently signing an MOU with AusNet, the largest energy grid operator in Victoria, Australia, to jointly explore business opportunities in the energy and infrastructure sectors.


hwshin@heraldcorp.com