Sambu Construction

Sambu Construction, founded in 1948 as the holder of Korea's first civil-and-building construction license, grew through major infrastructure projects such as the Gyeongin and Gyeongbu expressways and the Seoul subway system.

Its business mix is dominated by domestic construction revenue, followed by a steel segment handling fabrication and installation of steel structures, an overseas segment, and other operations including land sales and service income.

Key subsidiaries include Sambu Renaissance, Sambu Renaissance The Hill, and SI Naepo Industrial Complex Development.

The company's scope covers civil works such as roads, subways, railways, power plants, dams, ports, water and sewage facilities, and bridges, as well as building construction including public facilities, apartments, and office buildings.

It has also pursued R&D in integrated waterproof paving materials and load-distributing precompression micropiles to strengthen its construction technology capabilities.

However, following a project-financing default tied to the Heonin-maeul development in 2011, the company first entered court rehabilitation in 2015; accumulated operating losses from 2020 led to complete capital impairment by 2024 and a second rehabilitation filing in February 2025, making balance-sheet restructuring, rather than core-business stability, the dominant issue in recent years.

Since 2026, following plan approval and a rights offering that brought in a new controlling shareholder, the company has been attempting a transition toward operational normalization.

On an annual basis, revenue rose from KRW436.3 billion in 2022 to KRW575.0 billion in 2023, then fell sharply to KRW462.4 billion in 2024 and KRW111.0 billion in 2025, while the operating margin remained negative throughout at -18.8%, -13.6%, -24.3%, and -24.0% respectively.

Owners' net loss widened from KRW90.4 billion in 2022 to KRW110.5 billion in 2023 and KRW127.7 billion in 2024, before narrowing somewhat to KRW76.7 billion in 2025, though the loss remained substantial.

On a quarterly basis, 2Q25 revenue of KRW41.6 billion came with an operating loss of KRW30.2 billion and a net loss of KRW48.9 billion, before 3Q25 revenue held at a similar KRW39.1 billion while operating income turned positive at KRW14.9 billion and net income at KRW17.9 billion.

In 4Q25, however, revenue fell to KRW25.3 billion and operating income was positive at KRW18.2 billion, yet the company still posted a net loss of KRW16.0 billion, showing a divergence between operating and net results.

In 1Q26, revenue was KRW15.7 billion with an operating loss of KRW1.1 billion and a net loss of KRW2.0 billion, a narrower loss but still negative, while 2Q26 revenue of KRW22.0 billion came with an operating loss of KRW6.9 billion even as net income surged to KRW176.4 billion.

This net income surge stems from roughly KRW206.5 billion in debt-forgiveness gains recognized during the creditor-rights adjustment under the rehabilitation plan, rather than from operating profit, and should be understood as a one-off accounting effect of the court process.

Indeed, operating income remained in the red over the same period, making it difficult to read the recent net income rebound as a direct signal of core-business recovery.

Korea's construction industry has passed through a period in which lingering wariness over project-financing (PF) risk has squeezed both the credit standing and public-sector order competitiveness of small and mid-sized builders.

Sambu Construction likewise suffered weaker public-works performance and lower revenue tied to a credit-rating downgrade, though cost cuts are said to have partially improved gross profit and operating income.

On a nine-month cumulative basis through 3Q25, consolidated revenue fell 68.1% year on year, while the operating loss narrowed 33.9% and the net loss narrowed 26.9%, suggesting that cost restructuring helped cushion losses even as revenue contracted.

On the overseas front, expectations are cited around FI-led development projects and proposal-type public tenders, Southeast Asian infrastructure expansion via the Economic Development Cooperation Fund and the Asian Infrastructure Investment Bank, and expanded participation in Middle East and Africa SOC construction.

These, however, are sector-wide, medium- to long-term opportunities, and whether a company emerging from court rehabilitation can actually capture them depends first on financial normalization and the restoration of construction capability.

The fact that several of Korea's top 100 builders posted operating losses in 2024 suggests that profitability pressure in the construction sector is a structural, industry-wide issue rather than one specific to Sambu Construction.

The nearest event is the Korea Exchange's decision on whether Sambu Construction's listing-eligibility review case will be referred to its listing committee, which will determine the fate of the ongoing trading suspension.

The delisting causes tied to the substandard audit opinion and complete capital impairment have been resolved through re-audit and capital restructuring, but a separately notified eligibility review process remains outstanding, leaving the timing of trading resumption uncertain.

On the management side, an extraordinary shareholders' meeting on October 14 is set to appoint nominees from new controlling shareholder Rebuild Sambu Holdings along with accounting and legal experts as directors, which would complete a structure in which the new controlling shareholder participates directly in management through the board.

The key to core-business normalization is the ability to convert order backlog into actual revenue; while the half-year order backlog for major projects exceeds KRW430 billion, some sites, including the Changwon Naegok urban development project, remain suspended or not yet started.

The company has stated it plans to use rights-offering proceeds for debt repayment and management normalization, and expects to restore its operating capacity in public works and civil engineering once trading resumes.

That said, some observers note that securing funding alone cannot guarantee normalization amid an ongoing construction-sector downturn, making the actual recovery of new orders and cash-generating capacity the metric to watch.