Doosan Group Chairman Park Jeong-won.

Doosan Corp., which underwent restructuring in the past two years, saw operating income turn around 300 billion won.

Doosan Corp., the holding company of Doosan Group, said in an electronic filing that the company posted 306.3 billion won in operating income in the second quarter of the year, a 63.9 percent jump over the same period of last year. Doosan Corp. returned to a range of 300 billion won in operating income in the four quarters following the second quarter of 2015, when the company logged 308 billion in operating income. The company saw its net income surge 762.8 percent to 181.2 billion won.

If Doosan DST and Doosan Infracore, which belonged to Doosan Group last year but was disposed of this year, are accounted for, Doosan Corp. saw its operating income surge 33.2 percent. 

Business analysts said Doosan Corp. will likely be firing on all cylinders after turning around its operations following a massive restructuring process. 

Doosan Group Chairman Park Jeong-won, who took office in March following in the footsteps of former Chairman Park Yongmaan, has now removed internal barriers and has much room to maneuver on his own. Looking at Doosan Group’s 2nd quarter business performance, it implemented a strategy whereby it chooses which core businesses to retain and non-essential ones to dispose of. Despite the decline in quantitative growth, the overall plan may have worked.

Doosan saw its assets decline by 4.251 trillion won or 7.6 percent by disposing of such businesses as its machine tools, national defense and heat recovery steam generator businesses. Doosan lost its weight, but saw the ratio of operating income surge from 4.1 percent to 7.2 percent. 

In particular, Doosan Infracore, which underwent a massive restructuring, saw the ratio of operating income redouble from 4.7 percent to 10.7 percent in one year. The company’s restructuring began to pay off. Thanks to the restructuring of Doosan Infracore’s headquarters and Chinese operation, coupled with Doosan Bobcat’s outward growth, the company saw the ratio of operating income swell by 127 percent, a Doosan Infracore official said. The company chalked up 226.8 billion won in operating income by cutting down on personnel expenses, fixed costs and purchase prices. 

Doosan Heavy Industries & Construction, the flagship company of the group, saw operating income decline 22.8 percent to 72.5 billion won as it almost completed such mega-projects as Rabigh thermal power projects in Saudi Arabia. The company’s business performances are forecast to bottom out. Doosan Heavy Industries & Construction posted 262.3 billion won in operating income, a 58 percent jump over the same period of 2015, while Doosan E&C chalked up 10.3 billion won, a 515.6 percent hike. Doosan Engine turned in a 1.7 billion won operating profit. 

Doosan Group, which suffered a setback due to the sagging global economy, launched a massive restructuring plan to distinguish between good and bad units. Starting with Montabert, the French subsidiary of Doosan Infracore was disposed of to an American company for 135 billion won. Doosan then carried out a series sell-off. The business group has secured about 3.6 trillion won through the sales. 

Initial public offerings (IPOs) are slated for the second half of this year. Doosan Bobcat will likely see borrowings decline from 11 trillion won to 8 trillion won after the company is listed on the stock exchange. 

Doosan Group Chairman Park tasked his executives with completing restructuring plans by the first half of the year. Park is now tackling such tasks as transforming the fundamentals of Doosan Heavy Industries & Construction and settling the newfound duty-free business the group landed. He’s also exploring new growth engines, including the fuel cell business. The group plans to foster fuel cells, equipment production, and the robot industry as future growth engines, a group executive said.

Doosan Group headquarters in downtown Seoul. (Photos: Doosan Group)