SeAH Besteel Reports Operating Loss of 19.1 Billion KRW in Q3... Continued Deficit

[Asia Economy Reporter Hwang Yoon-joo] SeAH Besteel announced on the 29th that its consolidated operating loss for the third quarter of this year continued at 19.1 billion KRW. During the same period, sales decreased by 20.03% to 571.7 billion KRW, and net loss amounted to 14.1 billion KRW.

SeAH Besteel explained, "Due to the deterioration of demand industries caused by the novel coronavirus disease (COVID-19), sales volume of special steel products decreased compared to the same period last year, and fixed costs increased due to a reduction in operating days caused by summer vacations and traditional off-seasons." They added, "Cost burdens increased due to rising steel scrap prices and the application of summer electricity rates."

SeAH Changwon Special Steel recorded an operating profit of 6.2 billion KRW, down 49%, sales of 256.4 billion KRW, down 11.8%, and net profit of 4.6 billion KRW, down 46.6%.

SeAH Changwon Special Steel also experienced decreases in sales volume and sales revenue due to reduced demand caused by the prolonged global COVID-19 pandemic, and profitability declined due to worsening cost ratios from the sharp rise in nickel prices and the application of summer electricity rates.

SeAH Besteel expects that as the impact of COVID-19 stabilizes domestically and internationally and economic activities resume, sales volume will show a gradual recovery due to economic stimulus measures by major countries and increased global automobile production operating rates.

Additionally, the production operating rates of global automakers in Korea, the United States, India, and other countries are recovering rapidly, promoting the depletion of existing inventory and thereby expanding demand for special steel.

SeAH Changwon Special Steel is also expected to expand profits due to the effect of STS price increases. Due to increased demand for electric vehicle batteries and supply issues, the company raised product prices starting in August in response to the rise in nickel prices, a major raw material for STS, and expects performance improvement effects to appear in the fourth quarter, the company explained.