이 기사는 2022년 05월 18일 08:13 thebell 에 표출된 기사입니다.

AJ Networks, the operating holding company of South Korea’s AJ Group, is gearing up for expansion into overseas markets after over a year of restructuring.

AJ Networks signed a deal to buy the remaining 30% of AJ Rental Dallas Inc, which is 70% owned by the company, for $2.35 million earlier this month, according to its quarterly report released on May 13.

The company’s mainstay rental business covers pallets, construction equipment and information technology equipment. Construction equipment the company rents out includes vertical lifts and forklifts. AJ Networks holds a 25% share in the South Korean construction equipment rental market.

The cash injection into its Dallas subsidiary through the stake purchase is reportedly aimed at expanding the company’s foothold in America amid upbeat outlook for the US construction market. AJ Rental Dallas provides construction equipment rental services.

Revenue from construction equipment rental services has continued to grow in recent periods, from 79 billion won in 2020 to 83.7 billion won in 2021. Operating profit also increased by 28% to 10.7 billion won in the same period. Revenue in the first quarter of this year was 24.5 billion won, up 24.6% from a year ago.

AJ Networks also decided to establish a new entity in Poland at its board meeting on April 19. The decision was part of efforts “to secure drivers for long-term growth,” the company said.

The Poland unit will provide pallet rental services, paving the way to enter the European market. This marks the first time AJ Networks will set up its pallet subsidiary abroad.

Pallets support goods in a stable manner when they are lifted by a forklift. AJ Networks’ pallet rental services count the country’s major logistics firms like CJ Logistics and CJ OliveNetworks among its customers.

Pallet rental services are highly profitable. Their operating profit was 42.4 billion won last year, or 62.5% of AJ Networks’ total operating profit. Revenue was about 200 billion won, up 19.6% from a year ago.

AJ Networks plans to spin off its pallet rental service in the second half of this year, which is seen as the final step for the company’s restructuring plan.

The company began its restructuring early last year, selling non-core assets. This helped improve the company’s financial position significantly, AJ Networks said. Its debt ratio reduced from 451% at the end of 2020 on a consolidated basis to 274% at the end of 2021.

Korea Ratings, a domestic credit rating agency, recently upgraded its credit outlook on AJ Networks from BBB+/negative to BBB+/stable. (Reporting by Seo-young Kim)