Responding to Market Conditions with Profitability-Focused Strategies Such as Production Efficiency Improvement
Dongkuk Steel Group's hot-rolled steel business company, Dongkuk Steel, announced on the 26th that it recorded sales of 927.3 billion KRW and an operating profit of 52.5 billion KRW in the first quarter of this year on a separate basis. Compared to the same period last year, sales decreased by 24.1%, and operating profit fell by 58.7%.
Dongkuk Steel explained, "Performance declined as sales in the main business sectors of bars and shaped steel decreased due to the downturn in the construction industry." Sales volume in the thick plate sector also declined due to the slowdown in demand industries and the influx of low-priced imported products. Dongkuk Steel responded to market fluctuations with a profitability-focused sales strategy, including production efficiency improvements amid the slump in demand from steel-related industries.
Dongkuk Steel improved its debt ratio from about 121% immediately after the spin-off to 96.5%, a 24 percentage point improvement, through efforts to repay borrowings and maintain stable profits and losses.
In the first quarter, Dongkuk Steel continued its ‘Steel for Green’ strategy, a mid- to long-term eco-friendly growth plan. It is promoting initiatives such as ▲indoor processing of steel scrap at the Incheon plant ▲research on eco-friendly steelmaking processes including hyper electric furnaces ▲expansion of acquisition of International Environmental Product Declaration (EPD) certifications.
Preparing for a prolonged economic downturn, Dongkuk Steel plans to flexibly manage production through cost reduction, night shifts, and month-end shutdowns, while securing profitability by reducing inventory assets and expanding export channels.
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