GS Engineering & Construction (006360) Q2 2026 earnings summary

Executive summary

• Sales for 1H26 were KRW 5.9 trillion, down 17.2% year-over-year, with operating profit at KRW 164.8 billion and net income at KRW 25.1 billion, reflecting a significant decline in profitability.

• Cash, cash equivalents, and short-term financial instruments stood at KRW 3.1 trillion, with liquidity maintained at KRW 2,465.1 billion as of June 30, 2026.

• The order backlog remains robust, reaching KRW 73.5 trillion, with major new contracts in domestic and overseas markets.

• The company faced regulatory and legal challenges, including ongoing litigation, administrative sanctions, and a court injunction affecting the Sangdaewon 2 Redevelopment Project.

• 10,950 housing units were supplied in 1H26.

Financial highlights

• 2Q26 sales increased 13.0% year-over-year and 15.8% sequentially to KRW 2,779.4 billion.

• 2Q26 operating profit rose 43.6% year-over-year to KRW 91.4 billion.

• Net income for 2Q26 turned positive at KRW 14.4 billion, compared to a loss of KRW 87.1 billion in 2Q25.

• Gross margin improved to 14.6% in 2Q26 from 8.3% in 1Q26 and 11.6% in H1 2026.

• Basic EPS was -26 KRW in H1 2026.

Outlook and guidance

• New orders in 1H26 represent 33.2% of the full-year guidance, indicating a need for acceleration in the second half.

• The company targets stable dividend payouts, aiming to return at least 25% of controlling shareholder net income to shareholders from 2025 to 2027.

• Management expects continued order inflow in construction, infrastructure, and energy, with a focus on high-value projects and international expansion.

• Ongoing regulatory and legal risks may impact future operations and financials.