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DL E&C’s headquarters building at Donuimun D Tower in central Seoul. (Courtesy of DL E&C) |
[Alpha Biz= Paul Lee] DL Group, whose core subsidiary DL E&C ranks fourth in construction capacity in South Korea, has secured a long-term credit rating of AA- (Stable) from NICE Credit Rating, reflecting a solid earnings recovery despite a prolonged downturn in the construction sector.
According to NICE Credit Rating on January 5, the AA- rating marks the first comprehensive group-level credit assessment for DL, following earlier individual evaluations of DL E&C and DL Construction. The agency cited strengthened business competitiveness centered on DL E&C and stable cash-generating capacity as key factors behind the rating.
DL E&C experienced margin pressure from rising construction costs in 2022–2023 but has since shown a gradual improvement in profitability. The company’s operating profit is projected to rebound sharply, supported by the completion of major projects, expansion of housing presales, and continued workforce restructuring around 2024. Stable presale revenue and conservative project management were highlighted as contributors to improved cash flow.
As of the end of September last year, DL Group recorded a debt-to-equity ratio of 9.8% and a net debt dependency of 4.7%, a significant improvement from 14.2% at the end of 2021 following its transition to a holding company structure. Reduced borrowing, driven by dividend inflows from subsidiaries and asset disposals, has strengthened the group’s financial stability.
NICE Credit Rating noted that while DL may face ongoing financial support obligations for its subsidiaries, it is expected to maintain strong financial soundness in the short to medium term.
Meanwhile, Posco E&C saw its credit outlook revised to Negative, reflecting financial strain stemming from losses related to serious industrial accidents. The agency warned that tightening construction regulations and rising safety management costs are likely to widen credit disparities among major builders, depending on their cash flow resilience.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
