"Crying Over Apartments, Smiling Over Semiconductors... Diverging Fortunes for Top Construction Firms" (Comprehensive)

Second Quarter Performance Results Announced

Samsung C&T Construction Posts 71% Surge in Operating Profit, "Surprise Earnings"

GS Engineering & Construction Sees 62% Increase in New Orders Amid Earnings Slowdown

Samsung C&T Engineering & Construction Group, ranked number one in construction capacity evaluation, and GS E&C, ranked fifth, both released their performance results for the second quarter of this year on July 29. Samsung C&T recorded a significant surge in operating profit, fueled by projects such as semiconductor plant construction for group affiliates. In contrast, GS E&C’s profitability deteriorated due to the depressed housing market, resulting in diverging fortunes for the two companies. However, GS E&C managed to establish a foundation for a rebound by significantly increasing its new orders.

Samsung C&T Engineering & Construction Group's provisional results for the second quarter show revenue of 3.988 trillion won and operating profit of 202.0 billion won. Compared to the same period last year, revenue rose by 17.5% and operating profit jumped by 71.2%. Even when compared to the previous quarter, first quarter of this year, revenue increased by 16.9% and operating profit surged by 82%.

This strong performance was driven by growth in its high-tech business segment. Construction work on high-tech sites for group affiliates, including Samsung Electronics' semiconductor plants, progressed in earnest, leading to a considerable increase in workload. This was further supported by the smooth progress of overseas plant projects.

In contrast, GS E&C could not avoid the impact of the domestic housing market downturn and shifted into a period of stabilization. GS E&C’s second quarter revenue was 2.7799 trillion won, marking a 13.0% decline year-on-year, while operating profit dropped by 43.6% to 91.4 billion won.

The decline was led by sluggish performance in the architecture and housing division, which accounts for more than half of total revenue. Revenue in the Architecture/Housing Division was 1.5368 trillion won, a 28.5% decrease from 2.1484 trillion won in the same period last year. This was due to fewer new project starts amid the housing market slump. However, compared to the first quarter of this year, the figure represented an 8.1% increase.

The plants and infrastructure divisions experienced growth. Revenue from the Plants Division reached 402.0 billion won, up 18.0% year-on-year, while the Infrastructure Division recorded 396.5 billion won, an increase of 27.4% over the same period last year.

Although overall performance declined, new orders rose sharply. GS E&C secured 5.2242 trillion won in new orders in the second quarter, a 61.7% increase from the same period last year.

In the architecture and housing segment, the company won major urban renewal and residential redevelopment projects, including 1.9218 trillion won for the Sangdaewon District 2 redevelopment, 1.0142 trillion won for the Machon District 3 housing redevelopment, and 641.6 billion won for the Ansan Seongpo-dong residential-commercial complex project. For the first half of the year, GS E&C’s urban renewal project order intake totaled 7.4695 trillion won.

GS E&C expects that as newly secured residential projects move to the groundbreaking phase, revenue from the architecture and housing division will gradually recover. A GS E&C spokesperson said, "We will continue to establish a stable business portfolio and pursue management activities focused on profitability."

This content was produced with the assistance of AI translation services.