Doosan Heavy Industries & Construction Co., a leading power equipment maker in South Korea, is expected to perform better this year, driven by an increase in power plant retrofit orders.

Business prospects for the company are getting brighter, with analysts projecting the company to turnaround this year after years of losses since 2012 with an improved financial structure.

According to a report released by Hana Financial Investment Co. on Tuesday, the company’s overall cash flow will gradually improve on the back of an increase in power plant retrofit orders, which involve maintenance, repair and equipment supply for aging power plants.

Park Moo-hyun, an analyst at Hana Financial Investment, said that demand for repair services is on the rise as many power plants are getting old globally. The retrofit business accounted for 20 percent of total orders won by the company last year and 10 percent of revenue and these numbers are still counting.

Doosan Heavy Industries will receive more power plant retrofit orders this year based on several successful bids in the past. Last November, the company was selected as the preferred bidder for a 1 trillion won ($867 million) project to improve the performance of Afsin-Elbistan A Thermal Power Plant in Turkey.

Park said that an increase in retrofit orders will help boost the company’s equipment manufacturing business, which eventually will reduce potential risk from carrying out construction work. The company’s profitability and cash flow will improve accordingly, the analyst said.

In addition, Doosan Heavy Industries is expected to see a rise in new project orders. In February, the company won a 350 billion won EPC order to build boilers at the Barh Super Thermal Power Station in Bihar, India. Separately, the company was also selected as the preferred bidder last year to supply key power plant equipment such as boilers and turbines for a 1,000 megawatt POS Power thermal power plant in Samcheok, Gangwon Province.

By Noh Hyun

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