Semiconductor factory, AI data center demand

Dongkuk Steel Mill expands rebar production and sales

Dongkuk Coated Metal hit by exchange rate swings, protectionism

[Provided by Dongkuk Steel Group]
[Provided by Dongkuk Steel Group]

Dongkuk Steel Mill and Dongkuk Coated Metal, the two steel affiliates of Dongkuk Steel Group, disclosed their preliminary third-quarter earnings Friday. Dongkuk Steel Mill posted a 22% year-on-year rise in operating profit driven by demand from AI data centers, while Dongkuk Coated Metal swung to an operating loss.

Dongkuk Steel Mill recorded third-quarter sales of 932.3 billion won ($698 million) and operating profit of 29.9 billion won, up 21.2% and 22.0%, respectively, from a year earlier. Net profit fell 38.0% year-on-year to 6.2 billion won. Compared with the previous quarter, sales declined 6.4%, operating profit dropped 34.4% and net profit fell 46.5%.

The company said seasonal factors weighed on profit relative to the prior quarter, but that expanding rebar production and sales to meet demand from large-scale projects — including semiconductor factories and AI data centers — lifted operating profit above the year-earlier level.

To grow exports in its rebar segment, Dongkuk Steel Mill obtained Czech CCZ certification at its Incheon factory and developed H-beam export specifications at its Pohang factory. In the heavy plate segment, the company focused on developing specialty steel products, including titanium-clad (Ti Clad) steel, and on improving productivity. The company plans to maintain a profitability-focused sales strategy in the fourth quarter.

Dongkuk Coated Metal posted third-quarter sales of 579.9 billion won, an operating loss of 6 billion won and a net loss of 36.7 billion won. Sales rose 6.4% from the previous quarter, but both operating profit and net profit swung from positive to negative. Compared with a year earlier, sales climbed 19.5%, while losses continued on both measures — the net loss widened to 36.7 billion won from 2.3 billion won a year ago.

Dongkuk Coated Metal said exchange rate fluctuations in the third quarter weighed on results, given that exports account for roughly 70% of its sales. The company also cited the spread of protectionism across major markets, rising raw material costs and an influx of low-priced imports from China as additional headwinds.

Despite the challenging operating environment, the company worked to improve profitability by expanding production and sales of high-value-added color-coated steel. In the fourth quarter, it plans to adjust its export mix and increase the share of high-value-added products in its sales.


eyre@heraldcorp.com