Doosan Group, Successful in Harsh Restructuring, Accelerates with Hydrogen Engines

[Asia Economy Reporter Suyeon Woo] Doosan Group, which implemented harsh restructuring by selling assets worth more than 3 trillion won last year, has succeeded in improving its structure in just one year. In the first quarter of this year, its affiliates consecutively recorded surprising earnings, dispelling market concerns, and now the group is accelerating its reconstruction by leading with a new growth engine, the 'hydrogen business.'

According to the industry on the 9th, Doosan Corporation, the holding company of Doosan Group, succeeded in turning a net profit in the first quarter of this year. Net profit turned positive for the first time in five quarters, recording a surplus of 446.1 billion won, and operating profit increased by a whopping 403% compared to the previous year. Doosan Heavy Industries & Construction also recorded net profit for the first time in seven quarters, Doosan Infracore set a record for the highest quarterly operating profit ever, and Doosan Bobcat achieved its highest quarterly profit in 10 years.

These 'surprising earnings' of Doosan Group affiliates are the result of financial structure improvement through harsh restructuring at the group level. In April last year, Doosan Group submitted a self-rescue plan including asset sales worth 3 trillion won to creditors and has been thoroughly implementing it. They sold Doosan Tower, Neoplux, Doosan Solus, Motrol business, and even sold shares of the major affiliate Doosan Infracore. They carried out a paid-in capital increase of Doosan Heavy Industries & Construction worth 1.3 trillion won, and the owner family transferred 23% of Doosan Fuel Cell shares free of charge to Doosan Heavy Industries & Construction. As creditor repayments are completed and restructuring enters its final stage, the full-scale performance improvement of Doosan Group affiliates is becoming visible.

Having succeeded in slimming down, Doosan Group is dreaming of a second leap forward centered on the new growth engine, the 'hydrogen business.' Recently, Doosan Group gathered specialized personnel from affiliates such as Doosan Heavy Industries & Construction and Doosan Fuel Cell to establish a hydrogen TFT within Doosan Corporation. This is to establish a hydrogen business strategy covering the entire value chain including hydrogen production, distribution, and utilization, and to present a unified strategic direction.

Doosan Fuel Cell, leading Doosan Group's hydrogen business, is recognized for its outstanding technology in the hydrogen fuel cell power generation field. It has achieved new orders worth 1 trillion won for three consecutive years recently and set a sales target of 1.5 trillion won for 2023.

In the hydrogen mobility sector, Doosan Mobility Innovation (DMI) developed and successfully mass-produced the world's first hydrogen drone that dramatically extends flight time. Doosan Heavy Industries & Construction is constructing a hydrogen liquefaction plant on the Changwon factory site and plans to supply liquefied hydrogen produced with its own technology to hydrogen charging stations, aiming to become a leader in domestic hydrogen distribution.

Doosan Group is extending its reach not only to hydrogen utilization and distribution but also to 'production.' Doosan Heavy Industries & Construction is participating in a green hydrogen demonstration project started at the end of last year in Jeju Island, planning to produce green hydrogen at the wind power complex owned by Jeju Energy Corporation. They also plan to build hydrogen production systems and hydrogen compression storage systems there.

According to global investment bank Goldman Sachs, the global hydrogen market size is expected to expand to $12 trillion (13,446 trillion won) by 2050. Not only domestic but also leading overseas energy and mobility companies are expected to fiercely compete to dominate the hydrogen market. Doosan Group plans to target overseas hydrogen markets mainly in the U.S. and China, starting from Korea.

Doosan Group is knocking on the door of the U.S., where rapid growth in the eco-friendly energy market is expected, by promoting Doosan Fuel Cell America, which focuses on the PAFC (phosphoric acid fuel cell) business. In China, they began promoting hydrogen-related products by participating in the Hydrogen Fuel Cell Expo held locally in October last year.

Lee Sangheon, a researcher at Hi Investment & Securities, said, "With the improvement of the financial structure due to Doosan Group's restructuring effect, the turnaround in the performance of group companies will accelerate. In particular, for Doosan Heavy Industries & Construction, the base effect of one-time costs and improvement in cost ratio will make the net profit turnaround visible this year."