1. KG Steel Q2 2025 Earnings: Key Highlights

KG Steel reported revenue of KRW 805.1 billion, operating profit of KRW 36.9 billion, and net income of KRW 41.5 billion for Q2 2025. While revenue saw a slight decrease compared to the previous quarter, operating profit experienced a significant drop.

2. Analyzing the Factors Behind the Underperformance

Several key factors contributed to KG Steel’s disappointing Q2 results:

  • Falling Raw Material Prices and Slowing Demand: The decline in steel prices and weakening demand from downstream industries negatively impacted both revenue and profitability.
  • High Interest Rates: The current high-interest-rate environment increased KG Steel’s interest expenses, contributing to the decline in profitability.
  • Inventory Management Challenges: Decreased demand may lead to increased inventory levels and lower inventory turnover for the company.

3. Outlook and Investment Strategies

KG Steel’s future performance will largely depend on macroeconomic factors such as raw material prices, exchange rates, and interest rates, as well as the recovery of key downstream industries. Careful monitoring of potential raw material price increases and exchange rate fluctuations in Q3 is crucial.

Investors should consider the following:

  • Risk Management: Managing the risks associated with volatility in raw material prices, exchange rates, and interest rates is essential.
  • Business Diversification: Monitoring the success of KG Steel’s business diversification strategy is important.
  • Financial Health: Keeping a close eye on key financial health indicators such as debt-to-equity ratio and current ratio is crucial.