쌍용건설

With New Contracts in the Middle East and Africa (USD 353 Million), the Order Backlog Is on the Rise

 

During the previous management crisis, Ssangyong E&C also suffered from a lack of overseas contracts, with total orders repeatedly fluctuating. Last year, however, with new orders worth KRW 1.6 trillion (approx. USD 1.3 billion) under its belt, the company was back on the right track for full recovery. Ssangyong E&C continues to push itself this year, with the goal of securing as many overseas contracts as last year. Having already won two major contracts in the Middle East and Africa during the first half of this year, the company is striving to secure new orders overseas, especially in Southeast Asia.

 

Ssangyong E&C announced that it had won, in May, a contract to build the Dubai 1 Residence in the UAE, in addition to another project in Equatorial Guinea. The Dubai project is currently underway, although it has not been registered in the International Contractors Association of Korea (ICAK)’s database due to technical issues. If the Dubai 1 Residence contract (worth USD 167 million) is factored in, the total order amount is on the same level as last year. “As for the Dubai 1 Residence project, we have already ed a site manager. The project is in full gear now,” one company official noted.

 

The Dubai 1 Residence project was ordered by the Wasl Asset Management Group, one of the largest property developers in Dubai. In July 2018, the same company also awarded Ssangyong E&C a contract to build the Andaz Hotel, a Hyatt affiliate, in Dubai. Through these and many other projects, the two companies have maintained a strategic partnership. This strong relationship with the client will help Ssangyong E&C win new projects in the future.

 

The combined worth of Ssangyong E&C’s orders in 2018 was USD 1,435,450,000, the sixth largest amount among Korean contractors. The company has set a similar goal for this year and hopes to maintain a high ranking in terms of overseas contract orders. “Currently, we are working to win new bids in Singapore, Malaysia, Thailand and Dubai. And we hope to achieve success in these endeavors,” a company official said.

 

◇Order Backlog Is on an Upward Trend

In late 2012, Ssangyong E&C’s consolidated order backlog was more than KRW 4 trillion (approx. USD 3.4 billion), but that figure began to the following year, reaching KRW 1.44 trillion (approx. USD 1.2 billion) in late 2015. However, the company gradually recovered, and the figure went up to KRW 3.1 trillion (USD 2.6 billion) in late 2018, up 26.1 percent year-on-year and the highest amount in six years. When contracts for which construction has not yet commenced are considered, the consolidated order backlog is KRW 6.6 trillion (USD 5.5 billion) as of late 2018.

 

The order backlog is continuing to increase this year. According to the NICE Investors Service, as of late March this year, Ssangyong E&C’s order backlog is KRW 3.8 trillion (approx. USD 3.2 billion), and that figure increases to KRW 6.7 trillion if contracts for which construction has not yet commenced are counted. When the Dubai and Equatorial Guinea contracts, both won in May of this year, are factored in, the order backlog is still on an upward trend.