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South Korean builders lost $3.42 billion last year

Staff writer ▼ | May 5, 2016
Construction companies listed on the Korea Exchange posted more than W4 trillion in operating losses last year ($3.42 billion).
South Korean builders
Construction in Asia   Korean builders have hard time
Four out of 10 were unable even to pay the interest on their debt.

The Construction Association of Korea said the total revenues of 131 listed builders in Korea fell 8.7 percent in 2015 compared to the previous year. Operating losses swelled from W2.7 trillion to W4.2 trillion.

The average operating profit margin per builder shifted to minus 1.9 percent, while 44 percent of the construction companies posted net losses.

The debt-to-equity ratio on average stood at 173.1 percent, up 22.8 percentage points from the previous year.

"Since sales in the industry are determined by completed construction, earnings from the booming housing market in 2015 will not be reflected until 2017," a researcher said.

"But operating margins worsened as overseas construction projects dwindled amid low global oil prices, while losses from cut-price orders netted in previous years were reflected in these figures."