Hyundai Livart has secured a contract for preliminary construction work at the largest seawater treatment facility in Iraq's Basra region. Following sluggish performance due to last year's construction downturn, attention is focused on whether the company can stage a turnaround through large-scale overseas project wins.
Hyundai Livart announced on the 9th that it has signed a 117.8 billion won (approximately $80.1 million) contract with Hyundai Engineering & Construction for "preliminary construction work at the Iraq Basra seawater treatment facility." Preliminary construction involves establishing infrastructure such as worker dormitories, offices, and temporary roads ahead of major plant construction projects in refining, gas, and petrochemicals. The contract value represents 6.3% of Hyundai Livart's 2024 annual revenue of 1.87 trillion won. Compared to B2B business revenue of 659.3 billion won in the same year, the contract accounts for approximately 18%.
The project involves constructing a seawater treatment plant near Khor Al Zubair Port, located approximately 500 kilometers southeast of Baghdad. French energy company TotalEnergies, Basra Oil Company (BOC) under Iraq's Ministry of Oil, and Qatar's state oil company QatarEnergy are joint investors. Hyundai E&C won the turnkey contract in September last year.
Through this project, Hyundai Livart plans to establish infrastructure including on-site worker dormitories, offices, and ancillary facilities, along with electrical, fire protection, and telecommunications systems by June next year. A company official explained, "We won the competitive bid against local construction companies by demonstrating our proven execution capabilities, high-quality construction abilities, and price competitiveness from previous Middle East projects."
Hyundai Livart has recently been expanding B2B contracts centered on large domestic and international construction projects. This strategy aims to offset weakened performance caused by reduced built-in furniture supply volumes amid the construction downturn. According to the Financial Supervisory Service, Hyundai Livart's consolidated operating profit last year fell 34.6% year-over-year to 15.7 billion won, while revenue declined 17.3% to 1.55 trillion won. The fourth-quarter operating loss of 2.61 billion won widened compared to the same period the previous year.
Particular attention is being paid to whether Middle East construction projects can serve as a breakthrough for earnings recovery. Including this contract, the total value of overseas construction projects Hyundai Livart has won in the Middle East since 2019 amounts to approximately 730.7 billion won. Starting with the Saudi Arabia Marjan (MIP) project preliminary construction in 2019, the company has executed preliminary construction for major Middle East projects including the Jafurah gas treatment facility in 2022 and the Amiral project refinery in 2023. A company official stated, "Based on our experience executing large domestic and international projects and our local network, we will continue to expand overseas preliminary construction contract wins."