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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] SEOUL, Oct. 17 — Shares of Hyundai Engineering & Construction Co. (Hyundai E&C) tumbled sharply in early trading on Thursday, as analysts warned of a severe earnings shortfall for the third quarter.
As of 9:27 a.m., Hyundai E&C stock was trading at ₩57,400, down ₩3,800 (−6.21%) from the previous session.
According to a report released Thursday by Meritz Securities, the company’s consolidated operating profit for the third quarter is expected to fall 59.9% year-on-year to ₩45.8 billion, well below the market consensus estimate of ₩203.4 billion.
Meritz Securities analyst Moon Kyung-won attributed the sharp decline to higher selling and administrative expenses, explaining that
“Hyundai Engineering received a bond call of approximately ₩170 billion related to a petrochemical plant project in Poland, which raised its SG&A costs.”
Moon added that,
“Additional cost provisions were also recognized due to construction delays at Middle East plant sites, similar to those recorded in the fourth quarter of last year, and such impacts are expected to continue through the first half of next year.”
The steep earnings downgrade has weighed heavily on investor sentiment, with analysts noting that the company’s overseas project risk exposure and cost overruns remain key challenges heading into 2025.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
