Hyundai Engineering & Construction Co. (Hyundai E&C), South Korea’s second-largest builder by sales, on Friday reported its fourth-quarter operating profit fell 31 percent on year amid a slowdown in the global construction market hit by low oil prices.

Hyundai E&C said in a regulatory filing that it posted 220.4 billion won ($26.6 million) in operating income on a consolidated basis for the fourth quarter ended December, down 30.8 percent from the same period a year ago and 21.6 percent from the previous quarter. Sales reached 4.26 trillion won, declining 19.7 percent on year but edging up 0.5 percent on quarter.

It also posted 3.8 billion won in net income, nosediving 98.6 percent from a year ago and 96.6 percent from the previous quarter. The steep fall in net income was mainly due to foreign exchange losses caused from the stronger Korean won against the U.S. dollar, the company said.

The strong won makes Korean companies’ products and services less attractive in terms of price compared with their rivals’ in overseas markets. It also makes the value of greenback-denominated earnings of Korean exporters decline when converted into the won. The Korean won climbed almost 13 percent against the dollar last year on the resilient recovery in the country economy, which led Korea’s central bank to hike the benchmark interest rates for the first time since 2011.

Shares of Hyundai E&C closed at 40,950 won on Friday, down 2.85 percent or 1,200 won from the previous session.

For full 2017, Hyundai E&C’s operating profit fell 12.9 percent to 1.01 trillion won from a year ago, and sales declined 10.5 percent to 16.85 trillion won. The company said that it could raise more than 1 trillion won in operating income for a third straight year despite the low global oil prices and the sluggish global construction industry thanks to as an increase in domestic housing order and a few major infrastructure projects overseas.

In 2017, Hyundai E&C won 21.7 trillion won worth of orders, up 2.3 percent from a year ago. In overseas markets, it won orders to build a port for a power plant site in Matarbari in Bangladesh and extend road in Al Bustan in Qatar.

For this year, Hyundai E&C set a goal of winning 23.9 trillion won worth of orders, which is up 10.1 percent from last year.

An unnamed official from Hyundai E&C said the company expects to win large-scale orders such as liquefied natural gas (LNG) terminal construction project in Al-Zour in Kuwait, and other local housing construction projects. The company aims to raise 17.6 trillion won in sales this year, up 4.4 percent from a year ago, the official said.

By Lee Ji-yong and Lee Eun-joo

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