Hyundai Steel Co., South Korea's No. 2 steelmaker, said Tuesday that its second-quarter net profit plunged due to high raw material costs and sluggish earnings from overseas subsidiaries.
Net profit reached 51.1 billion won (US$43 million) in the April-June period on a consolidated basis, down 73.1 percent from a profit of 190 billion won a year earlier, the company said in a regulatory filing.
The affiliate of Hyundai Motor Group posted a record 5.5 trillion won in sales in the second quarter, but operating profit dipped 38.1 percent on-year to 232.6 billion won in the same period.
Hyundai Steel said a rise in raw material costs, mediocre earnings from its affiliates and inventory losses, led the decline in the bottom line.
The company said it expects to see improved earnings in the second half, with an anticipated rise in demand for automobile sheets and other key products.
Meanwhile, Hyundai Steel announced that it will invest 100 billion won to upgrade its steel rolling facilities, which will increase its annual output by 140,000 tons.
The company said it will also spend 58 billion won to build a new hot stamping plant in the Czech Republic, with commercial operation scheduled to start in 2021.