Doosan Heavy Industries & Construction Co., Korea’s largest power plant equipment maker responsible for a third of revenue for 11th largest conglomerate Doosan Group, has become fretful about its future under new energy policy of President Moon Jae-in to phase out of nuclear and coal fuel to generate power.

The equipment maker is also the parent of Doosan Infracore, Doosan Engineering & Construction and Doosan Engine.

Doosan Heavy posted 1.45 trillion won ($1.29 billion) in second-quarter sales with an operating profit of 62.6 billion won. Both figures were lower than a year ago. New orders in the April-June period were valued at 1.24 trillion won, up 17 percent from a year earlier.

Shares of Doosan Heavy closed Friday at 18,600 won, down 0.8 percent or 150 won from the previous session.

Its statement does not look that bad, but a bigger crisis is looming. According to the company on Thursday, it already slashed its annual new order target by more than 2 trillion won. Its early year target was 10.6 trillion won, up from 9.53 trillion won last year. But its ambition was dashed after Moon announced a major shift in energy policy to wean the country off coal and nuclear fuel to source electricity. The oldest reactor was decommissioned and the construction of new Shin Kori 5 and 6 reactors have been suspended for three-month activity to gauge public opinion to determine the fate of the new reactors.

The company is the country’s sole supplier of key nuclear power plant equipment such as reactor, steam generator and turbine, and facilities to handle nuclear fuels. It also offers boilers and turbines to thermo-power coal plants.

Its dwindling order balance is also worrisome. The company’s order balance fell to 19.08 trillion won at the end of June from 20.5 trillion won at the end of December. It is still higher than that in 2013 and 2014, but the pipeline is at risk.

"Due to Korea’s nuke and coal-free policy, Doosan Heavy Industries & Construction will inevitably lose 300 billion won in sales this year and another 700 billion won in 2018 and 2019,” said Lee Sang-hyun, an analyst at IBK Investment & Securities.

The company has turned attention to wind energy and gas turbine business, export of nuclear reactors and nuclear reactor decommissioning.

By Moon Ji-woong and Yoon Jin-ho

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]