Doosan Bobcat Inc., a lucrative compact construction equipment maker owned by Doosan Infracore Co., reported stellar fourth-quarter earnings that beat market expectations benefiting from a diversified product mix and restructuring at its European rivals.
Doosan Bobcat, which made a debut in the Seoul stock market in November, announced in a regulatory filing on Wednesday that its operating profit during the fourth quarter ended December last year surged 52.8 percent to 110.5 billion won ($96.89 million) on a consolidated basis from a year ago. Sales rose 6.7 percent on year to 1.06 trillion won. The company’s operating income and sales also came in above market consensus of 109 billion won and 1.03 trillion won, respectively.
The company has achieved such strong earnings, although many companies delayed investment in heavy equipment in the second half of last year amid lingering uncertainties over the U.S. presidential election, said an official from Doosan Bobcat. The company’s stellar performance mainly owed to its successful product diversification adding high value-added products, improved production efficiency and restructuring of its competitors in Europe which is well underway, the official added.
For full 2016, its operating profit rose 16.3 percent on year to 448.5 billion won on sales of 4.09 trillion won, up 1.3 percent.
Boosted by robust earnings of Doosan Bobcat, Doosan Infracore, the largest shareholder of Doosan Bobcat with a stake of 59.33%, returned to profit on a consolidated basis in the fourth quarter. It swung to an operating profit of 100.3 billion won from operating loss a year ago while its sales dipped 17.6 percent to 1.38 trillion won.
Doosan Infracore could make a turnaround due to Doosan Bobcat that accounts for the biggest share of Doosan Infracore’s operating income on a consolidated basis, Han Young-soo, an analyst at Samsung Securities, said, adding that earnings from other units remained sluggish.
Despite strong earnings, shares of Doosan Bobcat and Doosan Infracore on Thursday fell 3.9 percent, or 1,450 won, and 5.8 percent, or 520 won, respectively, from the previous session to end at 35,400 won and 8,480 won.
By Yoon Jin-ho
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