Hyundai Steel (004020.KS) reported first-quarter operating profit of 15.7 billion won ($11 million), down 63.7% from a year earlier, the company said in a preliminary earnings filing Thursday.
Revenue rose 3.2% year-on-year to 5.74 trillion won ($4 billion), while the company posted a net loss of 39.3 billion won.
"Revenue increased on higher product sales volumes, but operating profit declined due to rising exchange rates and raw material prices," Hyundai Steel said. "From the second quarter onward, operating profit is expected to gradually rebound on improved market supply-demand conditions from reduced inflows of low-priced imported products and the impact of price hikes on key products."
Regarding the increase in borrowings and debt ratio, the company added that the rise was "a temporary increase due to investment execution for future growth, including capital contributions to the U.S. steel mill."
Hyundai Steel said it plans to prioritize profitability improvement this year and focus its capabilities on securing new demand.
The company is moving to capture new demand and gain an early foothold in the market amid growth in the power infrastructure industry at home and abroad. Targeting the steel market for data center construction, which is expanding on the back of increased artificial intelligence (AI) investment, it plans to build standard models by size and customer-tailored models, while pursuing total package supply of plate and bar/shape products rather than individual items.
The company is also responding to growing demand for energy storage systems (ESS) driven by the expansion of renewable energy and power grid stabilization. It has completed the development and KS certification of high-performance shape steel for ESS enclosures—structures that protect power control devices—and is expanding sales, including the supply of initial volumes of low-temperature impact shape steel to the North American market.
In line with the government-led buildout of domestic power grid infrastructure, the company has also established a response system covering all transmission tower products, including shape steel and heavy plate, and is expanding orders for steel materials used in transmission towers.
This year, Hyundai Steel launched the world's first combined electric arc furnace and blast furnace process to mass-produce carbon-reduced steel sheets with 20% lower carbon emissions than existing blast furnace products, supplying them to automakers. The company plans to pursue additional steel grade certifications to accelerate sales in the carbon reduction market.
"We will secure new demand in the power infrastructure industry, actively respond to demand for carbon-reduced steel through the combined electric arc furnace and blast furnace process, and achieve profitability improvement going forward," a Hyundai Steel official said.
