Dongkuk Steel, 2Q Operating Profit 207 Billion KRW... Up 107% YoY

[Asia Economy Reporter Hwang Yoon-joo] Dongkuk Steel announced on the 17th that its consolidated operating profit for the second quarter reached 207 billion KRW, a 107.4% increase compared to the same period last year. Sales rose 39.6% to 1.818 trillion KRW, and net profit jumped 137.5% to 147.9 billion KRW.

Sales for the first half of the year amounted to 3.0138 trillion KRW, up 27% year-on-year, while operating profit increased 102.9% to 316.4 billion KRW. Net profit turned positive at 175.4 billion KRW.

Both sales and operating profit significantly increased due to the seasonal peak in the construction industry and strong steel demand in the home appliance sector. In particular, Dongkuk Steel produced and supplied 1.003 million tons of long steel products in the second quarter to expand steel product supply. This is the largest volume since 2008. In the second half of the year, the company plans to contribute to stabilizing the supply and demand of construction materials by adjusting major maintenance and holiday schedules.

Dongkuk Steel’s Brazil CSP steel mill recorded its best performance since its start of operations in 2016, supported by rising global raw material prices. In the second quarter, it produced 733,000 tons of slabs (semi-finished steel products), achieving sales of 692.2 billion KRW and operating profit of 209 billion KRW. With expanded infrastructure investments in major export countries such as the United States and Europe, and eased domestic sales regulations in Brazil, a favorable business environment is expected to continue in the second half of the year.

Additionally, Dongkuk Steel has established a premium color steel sheet production line, with full-scale commercial production starting in September, anticipating further sales and profit growth.

Dongkuk Steel expects an upgrade in its credit rating in the second half of the year due to increased sales and profits and improved performance at the Brazil CSP steel mill. In the first half of the year, Dongkuk Steel’s corporate credit rating outlook was upgraded from ‘BBB- (Stable)’ to ‘BBB- (Positive)’ by the three major credit rating agencies.