[Alpha Biz= Paul Lee] Korea Ratings (KIS) announced on June 23 that it has downgraded Dongwon Construction Industry’s unsecured bond credit rating from 'BBB (Negative)' to 'BBB- (Stable)'.
The downgrade reflects weakened profitability due to rising costs, continued losses, deteriorating cash flow, and the possibility of additional impairment losses, all of which are expected to delay any improvement in the company’s financial stability.
KIS noted that “significant losses were incurred in logistics center projects executed prior to 2023 due to rising raw material and labor costs.” It also pointed out that increased cost burdens across the company's order backlog led to consecutive net losses in 2022 and 2023.
Although Dongwon Construction returned to profitability in 2024, the rating agency emphasized that the company’s total equity fell to 62.4 billion KRW by the end of 2024, a sharp decline from 103.6 billion KRW at the end of 2021, reflecting a weakened financial structure.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
