STX Reports Operating Profit of 12.9 Billion KRW in H1, Up 503.2% YoY

[Asia Economy Reporter Hyunseok Yoo] STX announced on the 12th that its separate basis sales for the first half of this year reached 442 billion KRW, and operating profit was 12.9 billion KRW, representing increases of 66.3% and 503.2% respectively compared to the same period last year. Net profit also surged significantly by 264.4% to 11.4 billion KRW. The company achieved both sales growth and profitability improvement simultaneously. After successfully returning to profitability last year, it has maintained a stable profit trend this year.

STX recorded strong performance across its major business sectors including energy, raw material export-import, machinery & engines, and shipping & logistics. Moving away from traditional resource trading, the company’s portfolio expansion strategy focused on eco-friendly high value-added businesses such as biomass and secondary battery materials drove its results. Additionally, by strategically assessing shipping market trends, STX maximized profits in its shipping business segment.

Looking at detailed performance by business, in the energy sector, renewable energy centered on wood pellets showed strong growth, achieving sales of 87 billion KRW, approximately 76% higher than the first half of last year. Profitability improved through high-margin orders, with operating profit in the second quarter rising 143.9% compared to the same period last year. STX acquired a wood pellet factory in Malaysia at the end of 2020 and is expanding its eco-friendly energy business as a future growth engine. In fact, wood pellet sales in the first half of this year nearly doubled the total annual sales of 2020, demonstrating outstanding growth.

The shipping business recorded sales of 18.1 billion KRW, slightly down from the first half of last year, but operating profit surged more than sixfold. Strategic decisions based on long-standing experience, such as signing long-term charter contracts at the peak of the bulk shipping market and securing contracts before the charter market downturn, contributed to improved profitability.

The machinery & engine segment posted sales of 26.7 billion KRW, about 116% higher than the same period last year, driven by increased automobile export volumes. The company expanded exports to Africa, the Middle East, and the Commonwealth of Independent States (CIS) in partnership with a leading domestic global automobile company.

The raw material export-import business achieved sales of 300.2 billion KRW, a 63.6% increase, supported by soaring raw material prices in the first half, normalization of the Ambatovy nickel mine, and timely trading. STX holds shares in the Ambatovy nickel mine in Madagascar, one of the world’s top three nickel mines. Operations, which were suspended due to COVID-19, normalized from the first half of last year, contributing to improved results this year. Nickel sales in the first half of this year increased nearly 23 times compared to the same period last year, exceeding about 30% of last year’s total annual nickel sales. Consequently, operating profit in the raw material export-import sector rose sharply by 295% compared to the first half of last year.

An STX official stated, “Since exiting the creditor management system in 2018, STX has been transforming into a global specialized trading company by boldly restructuring high-risk businesses and low-profit items and strengthening management processes.” He added, “Thanks to these efforts to improve management structure, the company turned profitable last year and achieved performance improvements in the first half of this year, resulting in growth in both overall scale and profitability.” He further said, “We will proactively manage risks in preparation for an economic downturn in the second half and simultaneously strengthen the growth trend by actively discovering new energy-centered items.”