Dongkuk Steel Mill Q2 Earnings Shock: -200 Billion Won Operating Loss, What Should Investors Do?

1. What Happened? Q2 Earnings Shock

Dongkuk Steel Mill reported sales of 690.8 billion won, an operating loss of -200 billion won, and a net loss of -327 billion won in Q2 2025. While sales slightly decreased compared to the previous quarter, both operating and net income turned negative, exacerbating the company’s poor performance.

2. Why These Results? Analyzing the Reasons for the Decline

The main factors contributing to the decline include macroeconomic headwinds such as US tariffs, domestic market slowdown, rising raw material prices, and interest rate hikes. Increased integration costs and sluggish performance of existing businesses following the Ajou Steel acquisition also played a role.

3. What’s Next? Future Outlook and Investor Strategies

Downward pressure on the stock price is expected in the short term. In the medium to long term, the key will be whether positive factors such as synergy effects from the Ajou Steel acquisition, growth of new businesses, and expansion in overseas markets can lead to improved earnings. Investors should consider the following strategies:

• Short-term conservative approach: Caution is advised due to potential stock price volatility following the earnings announcement.
• Monitor risk management and business restructuring: Pay close attention to the company’s response to US tariffs, efforts to improve subsidiary operating rates, and cost reduction initiatives.
• Consider mid- to long-term investment after confirming a turnaround: It is prudent to consider investment after confirming tangible improvements, such as synergy with Ajou Steel and visible results from new businesses.