Hyundai Steel Reports Operating Profit of 331.3 Billion KRW Last Year, Down 67.7% YoY

[Asia Economy Reporter Hwang Yoon-joo] Hyundai Steel announced on the 29th that its consolidated operating profit last year was 331.3 billion KRW, a 67.7% decrease compared to 2018. During the same period, sales decreased by 1.3% to 20.5126 trillion KRW, and the operating profit margin dropped by 3.3 percentage points to 1.6%.

Hyundai Steel explained that despite iron ore prices soaring to as high as $120 per ton at one point last year, the reflection of price increases on key products such as automotive steel sheets and shipbuilding heavy plates faced difficulties, resulting in a decline in operating profit compared to the previous year.

Additionally, in the long products segment, sales volume and unit prices of rebar and shaped steel declined due to a deepening slump in construction demand in the second half of the year, which contributed to decreases in sales and operating profit.

Despite the challenging environment caused by global steel supply instability, Hyundai Steel plans to focus its capabilities as a global automotive material specialized steel mill to proactively respond to future demand. In this regard, the company aims to expand material and component certifications for major global automakers and complete the development of 247 steel grades by 2020.

Furthermore, through the new high-strength and wear-resistant steel brand 'WEAREX,' Hyundai Steel plans to target the high-performance automotive drivetrain parts market and expand supply to global automakers.

Facility modernization and new investments will also proceed. Hyundai Steel plans to invest 120 billion KRW by 2021 to rationalize cold rolling facilities to enhance competitiveness in automotive materials, and aims to establish a hot stamping plant in Ostrava, Czech Republic, with mass production targeted for January 2021 to meet global demand.

Hyundai Steel is concentrating company-wide capabilities on the automotive materials sector with the goal of increasing global automotive steel sheet sales to 1 million tons this year.

The company will also promote advanced manufacturing technology and smart manufacturing processes for sustainable growth. Based on energy-saving technologies such as improved by-product gas recycling rates and waste heat recovery, Hyundai Steel aims to realize a low-cost, high-efficiency steel mill. Additionally, it plans to develop a data platform covering all processes to enhance analytics capabilities and cultivate AI specialists, thereby establishing the foundation for a ‘Smart Enterprise’ through company-wide innovation.

The ‘Smart Enterprise’ goes beyond the ‘Smart Factory,’ which focuses on the advancement of manufacturing and production sectors, to encompass smartification across all processes including systems and infrastructure.

A Hyundai Steel official stated, "In 2020, uncertainties in the management environment will continue due to overlapping risks from global product supply-demand imbalances and unstable international situations. We will focus on restructuring business for profitability improvement and strengthening fundamental competitiveness, and by enhancing change-driving capabilities, we will transform into a company resilient to crises."

This content was produced with the assistance of AI translation services.