GS E&C (006360.KS) Q1 2026: Sales Slump 21.6%, Margin at 3.1%
A 43.4% SG&A reduction absorbed the revenue contraction at the operating line, but ₩200.5 billion in finance costs and an 83% effective tax rate left net income attributable to parent shareholders at virtually zero.
Source: Q1 2026 Quarterly Report (58th Fiscal Year, January 1–March 31, 2026) — Filed with DART | Consolidated Financial Statements | Unit: ₩ billions
GS Engineering & Construction posted consolidated revenue of ₩2.40 trillion in Q1 2026, a 21.6% decline from ₩3.06 trillion in the year-ago quarter, as years of deliberately restrained residential project commitments translated into sharply lower recognized revenue. Against that backdrop, operating profit rose 4.3% to ₩73.4 billion, lifting the first-quarter operating margin to 3.06%—the company's best Q1 operating margin in at least three years. The improvement is a product of cost discipline rather than pricing recovery: the gross margin actually deteriorated from 9.51% to 8.26% as site-level profitability weakened, and the entire operating gain traces to a ₩95.9 billion, 43.4% reduction in SG&A expenses. Further down the income statement, finance costs of ₩200.5 billion—equivalent to 2.7 times the quarter's operating profit—combined with an 83.2% effective tax rate to compress consolidated net income to ₩10.7 billion, leaving just ₩60 million attributable to GS E&C's own shareholders. The quarter reads as a deliberate down-cycle posture: a smaller company that is operationally leaner but still heavily constrained by leverage and tax dynamics that consume almost everything the operating business earns.
