Hyundai Steel, South Korea's second-largest steelmaker, reported a 51% decline in third-quarter net profit, amounting to $95.9 million. The dip in earnings is attributed to sluggish global demand for steel and a 10.2% drop in sales.
Hyundai Steel's recently released third-quarter financials revealed a sharp decline in profitability. According to a regulatory filing, net profits sank by 51%, amounting to $95.9 million for the July-September period.
Alongside the decline in net profit, sales also took a hit, dropping by 10.2% compared to the same period last year. The operating profit saw a considerable downturn as well, falling by 38.8%.
The company's earnings missed market expectations. Financial analysts had anticipated a net profit averaging around $99.5 million, based on surveys conducted by Yonhap Infomax.
Hyundai Steel cited a decrease in sales and a fall in global steel prices as the main reasons behind the lackluster performance. Given the weak demand in the global market, the company finds itself in a challenging situation.
In an effort to bounce back, Hyundai Steel is exploring new avenues for generating demand. The company is actively seeking out new orders and projects, including domestic semiconductor factory developments and wind energy projects in Europe and East Asia.
The company is also planning to establish a new subsidiary named Hyundai Steel Pipe. This move aims to enhance the company's expertise and competitiveness in the steel pipe sector.
Hyundai Steel faces a tough road ahead as it grapples with declining profits and sluggish demand. The company's plans to diversify and seek new business opportunities show promise, but only time will tell if these efforts can turn the tide.