Daewoo Engineering & Construction reports higher second-quarter operating profit

Daewoo Engineering & Construction said that second-quarter operating profit rose 182.6 percent from a year earlier, as a stabilizing cost ratio and improved profitability in its building division countered lower sales from fewer active construction sites.

The builder posted operating profit of 232 billion won ($162 million), compared with 82.2 billion won in the year-earlier quarter. Revenue moved the other way, falling 10.1 percent to 2.04 trillion won ($1.43 billion) from 2.27 trillion won, as the number of sites in progress declined.

Daewoo said the lower site count reduced sales during the quarter, but it described the revenue decline as slight. The company attributed the profit gain to a stabilized cost ratio and improved profitability in its building business.

Net income came to 167 billion won ($117 million) after a net loss of 42.9 billion won a year earlier.

Daewoo said the building division's improved profitability and the stabilizing cost ratio produced a significantly stronger operating result.

Daewoo said the revenue decrease stemmed from a lower number of sites in progress. The company said sales declined somewhat, while operating profit increased sharply.

First-half operating margin rose to 12.2 percent from 5.4 percent a year earlier, more than doubling over the period. Daewoo described that movement as a significant improvement in profitability.