A Swing into Negative Territory
Doosan Corp. announced on May 14 that its consolidated net loss totaled 379.9 billion won in the first quarter of this year. The company’s net profit dropped year on year from 54.9 billion won and its net loss hit a five-quarter high after 524.9 billion won in the fourth quarter of 2018.
Year on year, the company’s consolidated sales fell 1.2 percent to 4,427.1 billion won and operating profit dropped 74.4 percent to 90.9 billion won. The company decided to pay no quarterly dividend due to the huge losses. Previously, Doosan Group said that major shareholders would be given no dividend and bonus and executives’ salaries would be returned to a large extent.
Doosan Corp.’s poor performance can be attributed to Doosan Heavy Industries & Construction. Its earnings announcement is scheduled for May 15. Its Q1 sales and operating profit are estimated at 3.8 trillion won and approximately 35 billion won, respectively.
The Q1 sales, operating profit and net profit of Doosan Infracore, a subsidiary of Doosan Heavy Industries & Construction, are 2,009.3 billion won, 181 billion won and 74.6 billion won, respectively. The figures fell 7.9 percent, 27.6 percent and 42.9 percent from a year ago. Those of Doosan Bobcat are 1,064.2 billion won, 86.8 billion won and 33.5 billion won. Although the sales are close to the sales of Q1 last year, the profits dropped 23.4 percent and almost 50 percent.
Late last month, Doosan Group submitted a financial structure improvement plan to creditors. In the three trillion won plan, financial support from the creditors has been adjusted from 1.6 trillion won to 2.4 trillion won. Doosan Group is considering selling every asset possible and Doosan Solus and Doosan Tower are being mentioned as such assets. In addition, voluntary retirement applications are underway in Doosan Heavy Industries & Construction.