Donguk Steel Q1 net plunges on equity losses

SEOUL, May 11 (Yonhap) -- Donguk Steel Mill Co., South Korea's thick steel plate maker, said Thursday its first-quarter net profit plunged 51 percent on shareholding losses from its affiliates.

Net profit for the three months ending on March 31 fell to 42 billion won (US$37 million) from 84.8 billion won a year earlier, the steelmaker said in a statement.

In the January-March period, 6.5 billion won worth equity losses were reflected in the bottom line. The net result was also due in part to a base effect as the company posted sizable equity gains in the year-ago period, a company spokesman said.

Operating profit rose 11 percent year-over-year to 57.6 billion won in the first quarter from 52.1 billion won. Sales climbed 36 percent to 1.514 trillion won from 1.109 trillion won during the same period, it said.

Thick steel plates are mainly used to build ships and shipbuilders are longtime customers of Donguk Steel.

In 2011, Donguk Steel earned more than 40 percent of its overall sales from the thick steel plate business but in the first quarter the ratio plunged to 11 percent, the spokesman said.

As the shipbuilding industry is still struggling with a lack of orders after being hit hard the company has increased the portion of other products such as H-shaped steel beams and reinforced bars mainly used for residential and office buildings, he said.

kyongae.choi@yna.co.kr
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