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Biz News Korea(Eng)
SeAH Changwon’s earnings swing to profits under SeAh Group’s management
- Collected
- 2016.04.25
- Distributed
- 2016.04.26
- Source
- Go Direct
The company posted 42 billion won ($36.5 million) in operating profit in 2015, up 49.5 percent on-year even after its sales dropped 23 percent, according to the company. Its operating profit margin rose to 4.3 percent from 2.2 percent.
The unit specializing in producing high quality stainless steel was a cash cow for Posco, raking in 159.2 billion won in operating profit on sales of 1.66 trillion won in 2011. However, following its investment in structural steel, which was not its flagship business, it went downhill when the steel industry faced a slowdown.
Its operating profit tumbled to 28.1 billion won in 2014 and turned to the red in the first quarter of 2015. The consecutive losses prompted Posco to divest the unit to SeAH Group for 1.1 trillion won last March, which had its strength in structural steel business through its affiliate SeAH Besteel Corp.
SeAH Group had successfully turned it to the black in less than a year since its acquisition.
CEO Lee Jee-yong attributed the gain to bold restructuring of businesses and facilities that seemed to either overlap with SeAH Besteel or look unprofitable. He explained that SeAH CSS’ structural reform to focus on low-cost, high-quality products has helped offset the slowdown in the steel-making industry.
The company issued corporate bonds in January for the first time since it joined SeAH Group, and its three-year notes were oversubscribed, with demand reaching 90 billion won, more than planned 50 billion won.
By Park Yong-beom
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]