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Doosan Infracore saw its second quarter earnings plunge from a year ago due to a slowdown in the Chinese market, according to figures published Monday.
Doosan Group’s heavy machinery maker recorded second quarter operating profits of about 128.5 billion won ($110.1 million), dropping 11.7 percent compared to the same period last year.
Over the same period, the company’s sales dipped 6.3 percent to 1.78 trillion won.
Its net profit for the second quarter took a massive hit, falling by 88 percent compared to the same period last year to come in at just over 9.5 billion won.
“Despite the good performance by the North American subsidiary Doosan Infracore Bobcat Holdings, a small construction equipment maker, sales and operating profits fell from a year ago due to the slowdown in the Chinese market and other external factors,” the company said.
Despite the fall, Doosan Infracore shares rose Monday, buoyed by the news that the company is close to wrapping up preparations for listing Doosan Infracore Bobcat Holdings.
The move has been planned as part of Doosan Group’s plans to improve its financial stability.
The company said pre-initial public offering investments in the company are going according to plan, and the process will be wrapped up in August.
According to local news reports citing finance industry sources, nearly 800 billion won has been lined up for investment in Doosan’s U.S.-based subsidiary.
Industry sources say that Doosan Group is likely to use the newly raised funds to settle Doosan Infracore’s debts, which would lower the conglomerate’s debt ratio to below 200 percent.
At the end of the first quarter, the group’s debt ratio stood at 293 percent.
By Suk Gee-hyun (monicasuk@heraldcorp.com)
