Daewoo Engineering & Construction Co. (Daewoo E&C) on Thursday received an unqualified opinion on its financial statements for 2016 from an outside auditor, a move that is expected to help the company regain confidence from the market and pursue new business.
Last year, the company saw its share price drop and credit rating downgrade after independent auditor Deloitte Anjin LLC rejected to present an opinion on its third-quarter financial statements, deepening distrust in the market and leading financial authorities to tighten evaluation on the company’s new business projects. Since then, Daewoo E&C has drastically adjusted cost rate against sales and reflected future losses to clean the balance sheet.
According to Generally Accepted Accounting Principles (GAAP), an unqualified opinion is issued when an independent auditor judges a company’s financial statements are fairly presented without any misstatements. With the unqualified opinion that will make it easier to raise funds from financial institutions, Daewoo E&C will be able to maintain its credit rating, secure liquidity and seek new projects.
The builder reported a huge operating loss last year after reflecting all possible losses in the future based on stricter account rules following due diligence on its all businesses at home and abroad.
The company is expected to turn around this year as its businesses including local housing construction projects supplying of more than 70,000 houses over the last two years, petroleum residue upgrading business for S-Oil Corp. and the new town project in Hanoi, Vietnam would be reflected in its balance sheet this year.
Shares of Daewoo E&C closed Friday at 6,690 won, up 1.67 percent or 110 won from the previous session.
By Yong Hwan-jin
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]