SeAH Steel Holdings Q2 Revenue Up 14%... Swings to Loss on Offshore Wind Power Costs

Sales Growth Driven by Higher Pipe Sales and Prices in North America
One-Off Costs at SeAH Wind Reflected... Improvement Expected in Second Half

SeAH Steel Holdings continued its revenue growth in the second quarter of this year thanks to expanded sales of steel pipes for the North American oil and gas market. However, the company swung to an operating loss after reflecting one-off costs related to its offshore wind power business in the UK. For the second half, SeAH Steel Holdings expects performance to improve, driven by growing steel pipe demand in North America and the Middle East as well as the full-scale production of its UK offshore wind power project.

SeAH Steel Holdings CI.

On August 14, SeAH Steel Holdings announced that on a consolidated basis, second-quarter revenue stood at 1.1669 trillion won, with an operating loss of 50.8 billion won. Revenue increased by 14.3% year-on-year, but operating income turned negative. Net loss for the period was 74.6 billion won.

The increase in revenue was led by the expansion of steel pipe sales to North America's oil and gas sector and higher selling prices. Despite ongoing uncertainties such as the war between the US and Iran and logistical disruptions at the Strait of Hormuz causing delays in raw material shipments to the Middle East, solid performance was supported by higher domestic and export product prices at core affiliate SeAH Steel and rising demand for liquefied natural gas (LNG) pipelines.

The return to operating losses was influenced by one-off costs at SeAH Wind, the UK offshore wind power subsidiary. Initial depreciation of equipment to handle large-scale offshore wind projects and projected future costs were set aside as provisions at the time the contract for the “Norfolk Vanguard Project” was finalized.

SeAH Wind has now begun commercial production and plans to gradually recognize revenue related to the Norfolk Vanguard Project starting in the second half of this year. The company expects that by reflecting these provisions in advance, much of the uncertainty regarding large-scale future costs will also be resolved.

SeAH Steel delivered robust results. On a standalone basis, second-quarter revenue was 457.7 billion won and operating profit reached 32.6 billion won, up 19.2% and 54.3% year-on-year, respectively. Net profit for the period surged 163.6% to 26.8 billion won.

In the domestic market, increases in selling prices reflecting higher raw material costs and optimization of raw material operations led to an improved spread. In exports, improvements in profitability were supported by a rise in the KRW-USD exchange rate, an increase in the US rig count, and higher selling prices of oil country tubular goods (OCTG).

For the second half of the year, SeAH Steel Holdings expects favorable trends in both demand and selling prices for oil and gas steel pipes in the North American market. The company plans to focus on expanding sales, particularly of oil country tubular goods and pipelines, and strengthen competitiveness by upgrading facilities and quality at its US manufacturing subsidiary.

In the Middle East, the company will respond to investment demand in oil and LNG infrastructures, while also addressing delays in raw material procurement and shipping caused by geopolitical risks. In Korea, it aims to minimize the impact of a sluggish construction market by increasing product prices and boosting sales for LNG projects.

The company is also working to secure new sources of demand. It plans to respond to energy transition projects such as LNG, carbon capture, utilization and storage (CCUS), and hydrogen, as well as expanding sales of specialty steel pipes—including stainless (STS) pipes and pipelines—to meet growing electricity demand from AI data centers.

The UK offshore wind power business will continue to focus on stabilizing the initial mass production system for the already secured Norfolk Vanguard Project and making results more visible. Leveraging UK government support policies for offshore wind, SeAH Steel Holdings also plans to pursue additional large-scale project orders.

This content was produced with the assistance of AI translation services.