Dongkuk Steel's Q1 Operating Profit Plunges 92% to 4.3 Billion Won

Dongkuk CM Reports 37% Drop in Operating Profit to 15.1 Billion Won

Dongkuk Steel's operating profit for the first quarter of this year was reported to be less than 10% of the figure from the same period last year.

On April 25, Dongkuk Steel announced that its first-quarter sales reached 725.5 billion won, and its operating profit (on a standalone basis) was 4.3 billion won, representing sharp declines of 21.8% and 91.9%, respectively, compared to the previous year. Net profit was 2.5 billion won, down 91.6% year-on-year.

The main factor was a decrease in production and sales in the company's core rebar and section steel division, due to the continued downturn in the construction market. However, the company explained that it was able to realize some profit through production optimization and price normalization efforts, while the heavy plate division saw a slight increase in sales volume thanks to the provisional anti-dumping duties imposed on Chinese products.

Dongkuk Steel has established a new Export Strategy Team and Export Sales Support organization through frequent organizational restructuring and personnel appointments. The company is focusing on discovering new demand during the steel industry downturn by developing new products such as the glass fiber reinforced plastic rebar (GFRP) "DK Green Bar" and the large welded section steel "D-Mega Beam."

Dongkuk CM, an affiliate of Dongkuk Steel Group, recorded sales of 526.6 billion won and operating profit of 15.1 billion won, down 5.4% and 36.8%, respectively, from the previous year. Net profit was 9.8 billion won, a 54.3% decrease compared to the same period last year.

The company stated that prolonged stagnation in the domestic market led to a decline in profitability, resulting in reduced production and sales of cold-rolled coated steel products. However, by maintaining an expansion of exports for high value-added products such as Luxteel, the company increased production and sales of color steel sheets. Dongkuk CM focused on stabilizing Ajou Steel in the first quarter, and at the same time, opened additional offices in Houston in the southern United States and in Melbourne, Australia, thereby enhancing its local responsiveness amid changing trade environments.