Kolon Global significantly boosted its profitability in the second quarter of this year, thanks to the 'big bath' effect from proactively addressing potential losses at the end of last year and expanding its non-residential business.
On August 12, Kolon Global announced that it recorded consolidated sales of 750.5 billion won, operating profit of 52.2 billion won, and net profit of 32.3 billion won for the second quarter. Compared to the same period last year, sales increased by 2.2%, while operating profit surged by 173.6%. The net profit turned positive.
The construction division reported sales of 608.1 billion won and operating profit of 40.5 billion won in the second quarter. Following the proactive reflection of potential risks at the end of last year, the cost improvement effect led to a construction cost ratio of 87.7%, down 1.9 percentage points from the same period last year. Operating profit increased by 154.7% year-on-year.
Sales from the non-residential business continued to contribute, with projects such as Korean Air's engine maintenance facility, Tokyo Electron Korea's research facility, Samsung Electronics' ADC DP expansion project, and the Pyeongtaek Phase 1 effluent cooling facility reflected in the revenue.
New orders were primarily focused on the non-residential sector. In the first half of this year, Kolon Global secured a total of 985.4 billion won in new orders, including the 126.5 billion won integrated water supply project for the Yongin semiconductor industrial complex and the 39.9 billion won Kumho Tire manufacturing plant.
The leisure and asset management (AM) sectors also saw expanded performance following their merger at the end of last year. Second-quarter sales reached 85.7 billion won, a 304.2% increase from the same period last year, while operating profit rose to 13.5 billion won, up 610.5%. The company attributed this growth to the peak season effects in hotels, resorts, and golf courses, as well as the merger benefits.
Kolon Global undertook a big bath in the fourth quarter of last year to reflect potential risks in its financial statements. CEO Kim Young-beom stated during a town hall meeting with employees earlier this year that the company would pursue a restructuring focused on profitability.
A Kolon Global representative said, “With the stabilization of construction costs, the expansion of the non-residential business, and the growth of the leisure and AM sectors post-merger, we are maintaining a stable growth trajectory within a balanced business structure. This year, we will continue to enhance both profitability and growth through selective orders focused on profitability and strengthening our business competitiveness.”
Kolon Global has set a performance guidance of 3.1 trillion won in sales and 120 billion won in operating profit for this year.
Meanwhile, Kolon Global is expanding its reach into offshore wind power projects, following its ventures into onshore wind power, with a scale of 400 MW. The company is building a business structure that secures long-term profits from power generation by participating not only in simple construction but also in equity investments and operations in power generation projects.
* This article has been translated by AI.
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