Hyundai Steel Posts Operating Profit of 14 Billion KRW in 2Q, Turning to Black (Update)

[Asia Economy Reporter Park Soyeon] Hyundai Steel announced on the 28th that it recorded an operating profit of 14 billion KRW in the second quarter, turning profitable. However, this represents a 94% decrease compared to the same period last year. Sales amounted to 4.1133 trillion KRW, down 26.2% year-on-year. Compared to the previous quarter (4.668 trillion KRW), sales decreased by 11.9%.

According to Hyundai Steel, sales in the blast furnace segment slowed due to the slump in demand industries such as automobiles and shipbuilding caused by the COVID-19 pandemic, but thanks to improved performance in the electric furnace segment, the company turned profitable in the second quarter.

The company explained that having a diverse product portfolio covering both long products and flat products allowed it to improve profitability despite the overall sluggishness in flat products.

A Hyundai Steel official stated, "We optimized the production system for long products in line with the construction market conditions and fundamentally responded to low-priced distribution and processing orders, thereby improving profitability in the electric furnace segment. Moving forward, we will focus on securing profitability through optimal sales management based on demand and on technical sales to expand the market for new H-beam specifications (RH+), creating new demand."

Despite worsening external business conditions, Hyundai Steel is pursuing various measures to achieve its goal of qualitative growth centered on profitability, including business structure reform, stabilization of special steel quality, equipment performance improvement through the innovation activity 'HIT,' and improvement of quality nonconformities.

In particular, the company is concentrating its capabilities on developing new steel grades to expand the global automotive steel sheet supply and continuously strengthening related marketing to expand sales channels.

Hyundai Steel developed a 1.8G hot-stamping steel sheet with improved strength compared to the existing 1.5G Al-Si (aluminum silicon) coated hot-stamping steel sheet and applied it to the center pillar outer, thereby enhancing roof strength.

With the application of this steel sheet, occupant safety (roof strength) during vehicle rollover improved by about 5%, and mass production application to mid-to-large sedans is planned soon.

Additionally, the company developed exterior panels for side outers with even better formability and plans to supply them to Chinese automaker Geely and others, while supporting customer-tailored technical services through the operation of Global Technical Centers (GTC) at global bases.

Hyundai Steel expects profitability to gradually improve in the second half of the year based on normalization of automotive steel sheet volumes due to the recovery of global automobile production and efforts to reduce losses in low-profit segments.

Alongside this, Hyundai Steel is also engaging in activities to meet social demands on companies such as transparent management and environmental management.

To strengthen ESG (Environmental, Social and Governance) capabilities, one of the indicators evaluating corporate sustainability, the company has established a mid- to long-term ESG strategy framework and plans to continuously manage key tasks and current issues such as governance improvement.

Furthermore, by operating the clean facility for blast furnace gas at the third sintering plant of the Dangjin Steelworks and completing improvement investments in clean facilities for a total of three sintering plants, Hyundai Steel plans to reduce air pollutant emissions by more than 50% compared to 2018 this year.

Meanwhile, '(Hyundai IFC Co., Ltd.),' launched in April through the physical spin-off of the forging business division, demonstrated the efficiency of an independent management system by achieving profitability in the second quarter through early normalization.

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