Doosan Bobcat

Based on its robust sales record, Doosan Bobcat is emerging as a highly profitable company by taking such proactive measures as early debt repayment, refinancing and interest rate adjustment.

On March 5, Doosan Bobcat announced that it had succeeded in pushing for an adjustment of its interest rate on its corporate loans totaling $1.24 billion (about KRW 1.3 trillion), which means that the company could save as much as $6 million in financing costs in 2018 alone. Doosan Bobcat has seen its spread drop by 1.81 percent in just 10 months, including 0.5 percent (50 basis points) in the latest adjustment, which amounts to $24 million in interest savings on an annual basis.

Doosan Bobcat has worked consistently to reduce its financing costs through early repayment and refinancing arrangements. Since 2014, the company has made early repayments on four occasions for a total amount of $420 million. In May 2017, it refinanced its Term Loan B* loans with U.S. institutional investors and banks and lowered its previous interest rate by as much as 1.1 percent.

In November 2017, Moody's Investor Service raised Doosan Bobcat's credit rating from B1 to Ba3, leading to an additional decrease of 25 basis points (0.25 percent) in its interest rate.

Based on its abundant cash flow backed by the strong housing market in North America and steady improvements in its business performance, Doosan Bobcat has succeeded in making early repayments and refinancing arrangements as well as adjusting its interest rate. In line with rapid improvements in its profitability and financial structure, Doosan Bobcat has achieved average annual growth rates of 6.2 percent and 32.3 percent in operating profit and net income, respectively, since 2013. Most notably, the annual net income of Doosan Bobcat increased by 55.8 percent to $242.08 million in 2017.

"The latest interest rate adjustment is a positive outcome of the company's continuous efforts to secure financial soundness and maximize corporate profitability amid external circumstances characterized by interest rate hikes and financial market volatility," said an official of Doosan Bobcat. "Given the current cash flow, Doosan Bobcat is most likely to reach net cash** by 2020."