Hyundai Steel Company (004020) Q2 2024 earnings summary

Executive summary

• Operating profit increased quarter-over-quarter despite a sluggish steel sector, supported by cost-saving measures and improved subsidiary performance.

• Net profit remained low, with only marginal improvement from the previous quarter.

• Revenue for the first half of 2024 was ₩11,989 billion, a significant decrease from ₩25,915 billion in the same period last year, reflecting challenging market conditions and weaker demand in key sectors.

• Operating income dropped to ₩154 billion from ₩798 billion year-over-year, with net income attributable to controlling interests at ₩24 billion, down from ₩461 billion.

• The company maintained a strong liquidity position, with cash and cash equivalents at ₩1,161 billion as of June 30, 2024.

Financial highlights

• Consolidated revenue rose to KRW 6,041bn in 2Q 2024, up KRW 93bn sequentially but down KRW 1,097bn year-over-year.

• Operating profit increased to KRW 98bn from KRW 56bn in 1Q 2024, but was down from KRW 465bn in 2Q 2023.

• Net profit was KRW 1bn, nearly flat from KRW 32bn in 1Q 2024 and sharply lower than KRW 293bn in 2Q 2023.

• Gross margin for the first half of 2024 was 11.9%, down from 17.2% in the prior year.

• Basic EPS for the half-year was ₩183, compared to ₩3,506 in the previous year.

Outlook and guidance

• Steel market expected to remain slow, with lower commodity and product prices due to increased competition from Chinese imports and weak construction demand.

• The company expects gradual recovery in steel demand as global monetary tightening eases and fiscal stimulus is implemented in major economies.

• Ongoing focus on cost reduction, product portfolio optimization, and carbon reduction initiatives to enhance competitiveness.

• Company aims to expand global sales, invest in new production bases, and grow sales of carbon emission reduced steel.