Doosan Corporation (KRX:000150) earned ₩1,062,715m of operating income in FY2025. It paid ₩1,513,007m in finance costs.
The year before: ₩1,003,759m of operating income, ₩1,546,260m of finance costs.
Two consecutive years in which the cost of the group's financing exceeded everything its operations produced. Finance income partly offsets — ₩1,123,386m in FY2025 — leaving a net financial charge of about ₩390bn, which is 37% of operating income. But the gross figure is the one that describes the structure, and it has not been below operating income since FY2022.
This matters right now because on 31 July the company agreed to buy 70.61% of SK Siltron for ₩2,300bn, funded from cash on hand and borrowings whose terms are not yet set.
The second thing an investor should look at is the retained earnings line, because it tells you what a company has cumulatively achieved rather than what it did last quarter.
Doosan's consolidated retained earnings: ₩1,383,279m at the end of FY2021, ₩669,451m at FY2022, ₩207,970m at FY2023, then negative ₩81,552m at FY2024 and negative ₩80,639m at FY2025. It fell further to negative ₩108,197m at the end of March 2026 before a strong second quarter pushed it to positive ₩232,787m in June.
For roughly two years, a company with more than ₩13tn of total equity had eaten through every won of profit it had ever accumulated on a consolidated basis.
The history explains it. Doosan lost ₩1,700.8bn in FY2015, ₩348.9bn in FY2018, ₩972.2bn in FY2020 and ₩581.2bn in FY2022. Five of the last eleven years produced net losses at the group level. The 2020 restructuring, in which Doosan sold assets and the group survived a liquidity crisis, is the largest single reason.
One clarification, because it would be easy to draw the wrong conclusion: negative consolidated retained earnings do not prevent a company from paying dividends. Korean distributable profit is determined on the parent's separate financial statements, not the consolidated ones, and Doosan has kept paying — ₩118.8bn in FY2023, ₩125.1bn in FY2024, ₩147.0bn in FY2025 and ₩138.7bn in the first half of 2026. Rising each year, through the period when consolidated accumulated profit was below zero.
That is legal and it is also a choice worth noticing.
The cash flow pattern is severe enough that any single interim figure misleads.
On the cumulative basis Korean interim statements use, operating cash flow was negative ₩711.4bn at the end of March 2025, negative ₩572.0bn at the end of June, and negative ₩447.8bn at the end of September. Then the full year came in at positive ₩981.9bn, meaning the fourth quarter alone generated roughly ₩1,430bn. FY2024 shows the same shape: negative ₩1,042.7bn through nine months, positive ₩307.8bn for the year.
Doosan burns cash for three quarters and makes it back in the fourth. Compact construction equipment is built and shipped to North American dealers ahead of the spring and summer selling season, and the receivables settle later; power plant work bills on milestones. Neither is a problem in itself.
What it means practically is that the group carries a large working capital swing on borrowed money for most of every year. First-half 2026 operating cash flow was negative ₩732.3bn — worse than the same period in 2025 — while financing activities brought in ₩1,047.1bn.
Total liabilities were ₩22,432.6bn at the end of June against equity of ₩13,907.6bn, a ratio of 1.61. Current liabilities alone were ₩15,514.4bn — 69% of the total. Non-current liabilities were only ₩6,918.2bn.
A liability structure that short-dated is normal for a group with a large trade payables and dealer financing book. It also means a great deal gets refinanced every year, and the price of that refinancing has just gone up: the Bank of Korea raised its base rate to 3.00% on 27 August, its second consecutive increase, with board members most often citing 3.25% for six months out.
Intangible assets are ₩9,222.5bn of ₩36,340.2bn in total assets, a quarter of the balance sheet, most of it goodwill carried from the Bobcat acquisition. That is not a cash cost and it is not an imminent risk. It does mean tangible equity is a good deal thinner than the headline ₩13.9tn, and a meaningful share of that equity belongs to minority holders of the listed subsidiaries rather than to Doosan Corporation's own shareholders.
Against that, the SK Siltron purchase. Doosan disclosed it at 18.8% of its own equity, said it will pay 10% on signing and 90% at closing around 31 January 2027, and left the borrowing table in the filing blank with a note that details will be disclosed when fixed.
The company also said it intends to negotiate separately for the remaining 29.39% of SK Siltron, and that including that stake and the earn-out, total consideration could exceed 10% of its total assets.
So a group whose finance costs already exceed its operating income, whose operating cash flow is negative for three quarters of every year, and whose consolidated retained earnings crossed back above zero only in June, is committing to its largest acquisition in years into a rising rate environment.
The fair counter is that I am applying a single-company frame to a consolidation.
Doosan Corporation consolidates Doosan Enerbility, Doosan Bobcat, Doosan Robotics and Doosan Fuel Cell — separately listed companies with their own balance sheets, their own debt and their own boards. The ₩22.4tn of liabilities is not sitting at the holding company; most of it belongs to operating subsidiaries that service it from their own cash flow. Comparing group finance costs to group operating income is a real ratio but it flatters neither the parent's actual leverage nor its actual capacity.
The direction is also unambiguously better. First-half 2026 operating income of ₩829.3bn was up 49.1% year on year. Second-quarter net income of ₩535.6bn was more than double the prior year. Total equity has grown from ₩7,696.5bn at the end of FY2020 to ₩13,907.6bn. Enerbility has a nuclear and power order book, Bobcat is a genuine franchise, and the electronics business is growing at over 50%. The group that nearly failed in 2020 is not the group buying a wafer maker in 2026.
The amended acquisition filing with the borrowing terms. Amount, tenor, rate structure and collateral. ₩2.3tn financed with three-year bonds at a fixed coupon is one company; ₩2.3tn financed with short-term bank facilities repriced quarterly at a 3.00% base rate is another.
Second, the FY2026 finance cost line. If it comes in below FY2025's ₩1,513.0bn while operating income keeps growing, the ratio inverts and this concern retires. If it rises with the acquisition debt on top, the group spends 2027 with a financing bill larger than its operating profit for a third consecutive year.
Third, whether the fourth quarter delivers its usual cash recovery. Three quarters of negative operating cash flow is the pattern. A fourth quarter that fails to reverse it, in the year Doosan has to fund a deposit and prepare for a ₩2tn closing payment, would be the first genuine warning.
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