Daewoo E&C is set to find its footing under its new owner, Jungheung Construction.
Daewoo E&C, the nation’s third biggest contractor, is poised to make more aggressive investments on the back of Jungheung Construction Group, which in return will likely shift Jeolla provinces’ representative contractor into a “nationwide star.”
Jungheung Construction stuck a share purchase agreement (SPA) to acquire a 50.75 percent stake in Daewoo E&C from KDB Investment at Four Seasons Hotel in Jongno-gu, Seoul, on Dec. 9.
The signing of the deal came five years after Jungheung Construction was designated as a preferred bidder to take over Daewoo E&C in July. Jungheung Construction plans to focus on follow-up measures, including the pending approval of the acquisition by the Fair Trade Commission.
In July, Jungheung Construction was named the preferred bidder to take over the 50.75-percent stake in its bigger rival from an investment fund under the state-run Korea Development Bank (KDB).
Chairman Chung Chang-sun of Jungheung Group said at the signing ceremony, “Our acquisition of Daewoo E&C with excellent overseas capabilities is tantamount to Jungheung Group’s second founding.”
Jungheung Group will concentrate its all capabilities to make a global super construction group that does not waver amid outside environmental changes and hardships, he said.
Chairman Chung said “It is significant for executives and staffers to build trust and cooperation to help Daewoo E&C make a take-off and we will look at how to make such conditions and environment.”
In this context, he said, Jungheung will guarantee independent management and employment buyouts, improve the debt ratio, raise executives and staffers’ wages, raise core values such as passion, autonomy and responsibility, guarantee inside promotions and adopt merit-based personnel management.
Chairman Chung said Jungheung will look at how to promote shared growth with labor unions. Chairman Chung expressed hope that Daewoo E&C will be transformed into a more dynamic company.
“If we join forces with challenges and passion in a new era of changes, autonomy and responsibility and trust and cooperation, Daewoo E&C I’m dreaming of and a company Daewoo E&C executives and staffers are dreaming will be one,” he said.
Jungheung Group is a company specializing in construction, with assets worth 9,207 billion won as of 2021, according to figures released by the Fair Trade Commission. The group is known to have sufficient cashflows and sound money management.
Daewoo E&C was first in terms of housing supply in 2019 and 2020 on the back of its apartment brand Prugio. The contractor boasts world-class public works technology and engineering capabilities.
Daewoo E&C’s Q3 Operating Profit Surges 75.1 Percent YoY
In an electronic filing issued on Oct. 28, Daewoo E&C posted 6,246.5 billion won in sales, 534 billion won in operating profit, and 376.3 billion won in net profit in the third quarter of this year on a consolidated basis.
Daewoo E&C logged 6,246.5 billion won in cumulative sales in the first nine months of the year, accounting for 63.7 percent of this year’s goal of 9,800 billion won.
Looking at sales by each business, the housing construction business chalked up while the civil engineering business posted 954.6 billion won. The plant engineering business and other businesses logged 639 billion won and 401.6 billion won, respectively.
Daewoo E&C saw its Q3 operating profit jump 75.1 percent year-on-year, compared to 305 billion won in the same period of last year, to maintain the highest growth since the fourth quarter of 2020.
Its Q3 net profit stood at 376.3 billion won, a 121 percent year-on-year jump. The Q3 profit margin surged to 888.8 billion won, a 44.2 percent year-on-year jump over 616.2 billion won in the same period last year.
The profit margin ratio rose to 14.2 percent, a rise from 14.2 percent. The contractor saw its net profit during the January-September surpass that of the whole of 2020, set at 282.6 billion won.
The contractor saw its cumulative operating profit achieve more than 95 percent of that of the whole of last year.
_중흥그룹대우건설.jpg)
