Everything is A-OK

Doosan Infracore holds investor relations to dispel rumors on its U.S. affiliate Bobcat

Doosan Infracore Co. said no problems seen in its plan to expand capital of Bobcat, a U.S. heavy equipment company that it acquired last year.
President Kim Yong-sung of the company affiliated with Doosan Group, said there has been miscommunication on its plan to inject more fund into its U.S. subsidiary and rumors of financial problems surfaced after the announcement of the capital infusion plan and they have hurt the company with the loss of its public confidence.
The CEO said the fundamentals of the company are strong and the company will make public its operations as faithfully as it can. With regard to rumors that Bobcat is having problems, he said the company projected that the world construction industry will be down for the next two years when it took over Bobcat. The construction market would have one of the worst conditions in the second half, but the company has a contingency plan to cope with the situation if it ever occurs.
Kim also said Bobcat's sales increased by a percentage point worldwide,
although its been less than a year since Doosan took over the U.S. heavy equipment maker. He denied firmly the rumors that the company would have to inject additional funds into the heavy equipment maker due to the poor state of its performance this year.
The capital injection being undertaken now is likely to go smoothly without any problems although the world construction market has been sluggish.
Doosan Infracore held an investment relations session on July 21 to disclose the results for the first half of the year on a consolidated basis. The key figures include over 2.75 trillion in sales 316,1 billion won in operating profit, and 181.6 billion won in recurring profit, officials of the company said.
Despite the slowdown n the global economy, sales remained on n upward course. Major sales growth was seen in China(55% YoY), as well as in newly emerging markets (43% YoY), which include the former CIS, Latin America, the Middle East and India.
By product segment, construction equipment did particularly well, with sales 30 percent higher than they were in H12007, they said. Operating profit for the first half improved 47 percent year on year to 316.1 billion won. The company pursued a strategy of increasing the sales of products with the best margins and has seen results in innovation activities on the factory floor. As a result, the operating profit margin rose 1.9 percent to 11.5 percent.
The company's operation in China has had a good result in the first half due to resource development in Northeastern China and the Chinese government's massive development effort in the West have strongly driven sales of the most profitable medium-and large-sized models of construction equipment. The company also benefited from increased sales of its products in emerging markets such as in Latin America, with sales up 134 percent YoY, the former CIS where sales were up 77 percent YoY, Asia and India, which have contributed a lot to the first half results.
This year, the company is improving the global competitiveness of its construction equipment and machine tools to increase market share in key regions. The company also is continuing to develop emerging markets. As a result, total sales for the year have been projected at more than 5.18 trillion won, which would be 21 percent up from the 2007 figure, the officials said.
Cost-cutting efforts continue and other profit enhancing activities are being conducted so that the company can reach its 2008 goals of 500.9 billion in operating profit and 417.4 in recurring profit. Both of these figures are 30 percent better than last year's performance. nw

Doosan Infracore's advanced construction machineries are displayed on an exhibition.

Chmn. Park Yong-maan of Doosan Infracore Co.