South Korean construction firms see divergent backlog and revenue trends

South Korean construction firms are experiencing divergent trends between order backlogs and actual revenue recognition.

Umi Construction has secured approximately 2 trillion won in new orders and self-developed projects in the first half of this year, representing about 111% of its total 2023 revenue. This growth in new work comes as the company transitions high-profit existing projects into revenue. Key projects include the Gwangju Im-dong Champions City 1st phase and the Ulsan KTX Station area development.

In contrast, Daewoo E&C reports a growing order backlog of over 53 trillion won, yet its construction revenue has declined for three consecutive years. This discrepancy is attributed to the completion of large-scale housing and civil engineering projects, creating a time lag between securing new orders and their conversion into revenue through construction and sales. The company's future recovery depends on how quickly it can commence work on its significant backlog of urban renewal projects.