Seoul: Hyundai Steel Co., the second-largest steelmaker in South Korea, announced a reversal to a net loss in the first quarter, attributing the downturn to labor strikes and a sustained slump in the steel industry.
According to Yonhap News Agency, in the quarter ending in March, Hyundai Steel reported a net loss of 54.4 billion won (approximately US$38 million), a stark contrast to the net profit of 32.2 billion won recorded during the same period the previous year. The financial setback was disclosed in a regulatory filing by the company.
A spokesperson for Hyundai Steel explained that the delays in recovery of steel demand from construction firms and other customers, combined with strikes at the company's production facilities, significantly impacted their quarterly financial results. Notably, operations at the company's cold-rolled steel facility in Dangjin were suspended from February 24 to March 31 due to prolonged worker strikes over pay disputes.
The company is further challenged by external economic pressures, including the imposition of a 25 percent tariff on all steel imports by the U.S. government under President Donald Trump's administration. The tariffs, effective from March 12, aim to address trade deficits and strengthen domestic manufacturing but are expected to continue straining Hyundai Steel's earnings throughout the year.
In addition to the net loss, Hyundai Steel registered an operating loss of 19 billion won for the quarter, reversing from an operating profit of 55.8 billion won a year prior. The company's sales also experienced a decline, dropping 6.5 percent to 5.56 trillion won from 5.95 trillion won during the same timeframe.