DL E&C maintains AA- corporate bond rating, tops construction sector

DL E&C said Wednesday that major credit rating agencies have recognized the company as having the highest level of profitability and financial stability in the construction industry.

According to industry sources, DL E&C has maintained an AA- (stable) corporate bond rating — the highest in the construction sector — from both NICE Investors Service and Korea Ratings, and received an A1 commercial paper rating, the top grade, from Korea Investors Service.

The two agencies that assessed the corporate bond rating both highlighted improving cost ratios as a key driver of the company's earnings recovery.

NICE Investors Service cited DL E&C's diversified project portfolio, strong business competitiveness and stable operational base as major strengths. It projected that the company would sustain steady earnings on the back of improved profitability in the housing segment, solid cash generation and sound financial stability. Korea Ratings also pointed to the company's market competitiveness and extensive construction experience as the foundation of its business stability.

Ratings agencies also noted that the company's financial capacity has strengthened. Korea Ratings said DL E&C holds net cash of around 1.3 trillion won ($849 million), giving it ample financial headroom, and assessed that the company has built a financial structure capable of responding flexibly to market volatility through stable cash generation. NICE Investors Service likewise highlighted smooth cash generation and strong financial stability as key strengths. Korea Investors Service said DL E&C has sufficient liquidity to meet short-term funding needs, backed by its cash holdings and operating cash flow.

"This rating result reflects the fact that our stable operational foundation and financial management capabilities have again been recognized by Korea's major credit rating agencies," a DL E&C official said. "We will continue to strengthen our sustainable growth base on the back of a resilient financial structure."

Meanwhile, DL E&C posted preliminary first-quarter sales of 1.73 trillion won and operating profit of 157.4 billion won on a consolidated basis.