1. What Happened at Seowon E&C?

Seowon E&C reported a significant loss in Q2 2025, with revenue of KRW 14.6B, an operating loss of KRW 2.1B, and a net loss of KRW 14.2B. This represents a sharp decline compared to the same period last year and reverses the brief return to profitability in Q1 2025. Adding to the concerns, the company received a ‘disclaimer of opinion’ from its external auditor, raising doubts about its ability to continue as a going concern and increasing the risk of delisting.

2. What Caused the Decline?

Several factors contributed to Seowon E&C’s poor performance. Delayed payments on some contracts, construction halts related to the Petrofac HQC IJV LLC project, and challenging macroeconomic conditions, including high interest rates, volatile oil prices, and fluctuating shipping costs, all played a role.

3. What Should Investors Do?

Investing in Seowon E&C carries significant risk. Investors should exercise extreme caution and consider the potential for delisting. Careful monitoring of the following factors is crucial:

  • Financial recovery: Revenue growth, return to profitability, and debt reduction
  • Management normalization: Resolution of audit issues and improved transparency
  • New business development: Concrete plans and potential for success
  • Macroeconomic indicators: Interest rates, exchange rates, and commodity prices

4. Investor Action Plan

Investment decisions regarding Seowon E&C should be made with extreme caution and thorough due diligence. Consider the company’s fundamentals, management situation, and the outcome of any delisting-related lawsuits before making any investment decisions. Imprudent investments could lead to substantial losses.