Posted on 30 Oct 2019
Hyundai Steel Co. Tuesday announced its third-quarter operating profit fell sharply due to mounting iron ore costs and low demand in the construction sector.
The steelmaker under South Korea’s Hyundai Motor Group reported a meager operating profit of 34.1 billion won ($29.28 million) over sales of 5.04 trillion won for the July-September period. Operating profit plunged 66.6 percent from a year earlier and whopping 85.3 percent from the previous three months. Sales declined 3.6 percent from a year ago and 9.4 percent from a quarter ago. The bottom line showed a loss of 65.8 billion won in the third quarter.
Hyundai Steel shares on Tuesday closed 1.49 percent down at 32,950 won in Seoul.
The steelmaker blamed the poor performance to a 20 percent spike in prices of iron ores for making steel plates and its failure to reflect the cost increase on key products in a timely manner.
Lackluster sales in shaped steel mainly used in the construction industry also contributed to a slump in the profit.
Hyundai Steel is focusing on saving costs by optimizing material formulation and improving facility efficiency. Company-wide cost control efforts paid off in the third quarter, leading to cost savings of 145.7 billion won, the company said. Global sales of steel sheet for cars reached 523,000 tons on a cumulative basis in the third quarter, up 13 percent from a year ago, driven by technical marketing and new customers in Southeast Asia and Latin America.
Hyundai Steel also said it will expand the capacity of a metal separating plant by late next year to cover demand for 30,000 additional cars in response to Hyundai Motor Group’s vision for hydrogen and electric-powered vehicles.
