DL E&C maintains AA- credit rating for 8th consecutive year

DL E&C has maintained the construction industry's highest credit rating for the eighth consecutive year in NICE Credit Rating's regular credit assessment.

DL E&C announced Thursday that it retained its AA- (stable) rating in the review, a designation the company has held continuously since 2019.

NICE Credit Rating cited DL E&C's diversified business portfolio, strong competitive position and stable operational foundation as the key reasons for maintaining the rating.

The agency also gave high marks to the company's recovering profitability driven by improved cost ratios in the housing segment, smooth cash generation and sound financial stability. On a corporate tax assessment notice recently issued by Saudi Arabian tax authorities, NICE Credit Rating judged the impact on DL E&C's business and financial stability to be limited. The agency noted that the company has no ongoing projects in Saudi Arabia and plans to contest the assessment without making any tax payment.

The company's financial structure was also assessed as stable. DL E&C's average free cash flow over the past five years stands at 262.9 billion won ($171 million). NICE Credit Rating projected that the company will sustain solid cash flow going forward, supported by strong pre-sale performance and a stable business structure.

As of the end of the first quarter, DL E&C held net cash of 1.28 trillion won, with a debt-to-equity ratio of 87.5%. Profitability is also gaining momentum, as the share of projects launched during the period of sharply rising construction costs has declined and cost ratios in the housing segment have improved.

DL E&C posted consolidated operating profit of 157.4 billion won in the first quarter, with an operating profit margin of 9.1%. Operating profit surged 94.3 percent year on year, while the margin rose 4.6 percentage points over the same period.

Net profit for the period reached 160.1 billion won, up 429.5 percent year on year. NICE Credit Rating projected that DL E&C will sustain strong operating profitability going forward, driven by an expansion in sales from higher-margin projects and continued improvement in cost ratios.

"This credit rating review has again recognized our strong business competitiveness, stable operational foundation and industry-leading financial stability," a DL E&C finance official said. "We will continue to pursue steady earnings improvement and enhance corporate value, grounded in profitability-focused management and rigorous risk management."