Six major Korean construction firms are likely to see their earnings improve in the second quarter of 2016 from a year ago amid a housing boom, a report showed Friday.
The builders are expected to post 675.6 billion won ($587 million) in combined operating profits for the second quarter, up 16.5 percent from a year ago, according to the report by online financial information provider Fn Guide.
The six builders are Samsung Engineering Co., the plant engineering unit of South Korea's top conglomerate Samsung Group; Daelim Industrial Corp.; GS Engineering & Construction Corp.; Hyundai Development Company; Hyundai Engineering & Construction, the construction arm of Hyundai Motor Group; and Daewoo Engineering & Construction.
Among the six builders, Samsung Engineering appears likely to see its operating profit increase by 120.9 percent to 42.8 billion won in the second quarter.
Samsung Engineering shifted to an operating profit in the fourth quarter of 2015 after suffering an operating loss of more than 1.5 trillion won a quarter earlier. The engineering firm has posted operating profits since the October-December quarter.
Meanwhile, Daelim Industrial is expected to post 102.8 billion won in operating profit for the second quarter, up 63 percent from a year ago Fn Guide said it estimated that the operating profit of GS Engineering & Construction is likely to come to 47 billion won, up 23.2 percent from a year ago. "The earnings of the construction firms appear likely to improve for the time being as low interest rates fueled the housing boom," an industry official said.
Earlier this month, the Bank of Korea slashed the key rate to a new record low of 1.25 percent for June to bolster growth in Asia's fourth-largest economy. It marked the first rate cut in 12 months. (Yonhap)