Hyundai Steel’s profit doubles in 2014 on expanded capacity, merger

Hyundai Steel saw its operating profit double in 2014 on the back of its expanded capacity and a significant change in its sales mix as it moved into more value-added products.

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South Korea’s second-largest steelmaker announced on Thursday January 29 that its operating profit went from 717 billion Won ($654 million) in 2013 to 1.44 trillion Won ($1.31 billion) last year.

It shipped 18.4% more steel in 2014, at 19.44 million tonnes, as it started its third blast furnace late in 2013 and subsequently completed the installation of rolling mills that took its flat steel capacity to 8.8 million tpy of hot rolled coil and 3.5 million tpy of heavy plate.

Hyundai Steel’s finished steel output surged by 20.1% last year to 19.1 million tonnes. Of these, 12.21 million tonnes were flats, which increased from 8.91 million tonnes in the previous year.

Long steel output moved slightly down to 6.88 million tonnes from 6.97 million tonnes.

In 2014, Hyundai Steel also fully benefited from its late-2013 merger with the cold rolling steel division of its sister company Hyundai Hysco.

As a result, its product mix changed dramatically. The share of its long steel products fell to 36% from 43.9% in 2013.

Cold rolled coil took up a 32.3% share in 2014, from zero in the previous year. HRC’s share fell to 19.2% from 48.2% while plate’s rose to 12.5% from 7.9%.

Hyundai Steel also reported a 25.1% year-on-year boost in sales revenues to 16 trillion Won ($14.63 billion), and a 10% lift in net profit to 751 billion Won ($685 million).

Its operating margin increased from 5.6% to 9%, while its Ebitda (earnings before interest, taxes, depreciation and amortisation) margin went from 11% to 16.3%.

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