According to industry reports on June 29, the performance of the two holding companies within SeAH Group showed a significant disparity in the first quarter of this year. SeAH Bestil reported consolidated sales of 967.6 billion won and an operating profit of 30.7 billion won, marking increases of 7.5% and 69.8%, respectively, compared to the same period last year.
In contrast, SeAH Steel's sales rose by 4.7% to 991.9 billion won, but its operating profit plummeted by 60.1% to 26.7 billion won. The net profit also shrank by 86.2% to 8.2 billion won. While the sales figures were similar, the profitability diverged significantly.
The contrasting fortunes of the two companies stem from their respective business portfolios. SeAH Bestil has managed to enhance profitability through proactive sales activities and a strategy focused on high-value products, despite challenges such as the influx of low-priced imports from China and deteriorating global export conditions. The company has expanded its business beyond automotive specialty steel into high-value markets such as defense, nuclear power, and aerospace, establishing a stable revenue base that contributed to its improved performance.
SeAH Bestil is also accelerating efforts to secure future growth. The company is intensifying its focus on the aerospace materials market, centered around its U.S. specialty alloy (SST) production base, while expanding its supply of specialty steel for defense and nuclear power applications, aiming to transform into a high-value materials enterprise. This strategy seeks to enhance resilience against market uncertainties through diversification of its product portfolio.
On the other hand, SeAH Steel's business structure, which has primarily grown around North American oil country tubular goods (OCTG), has recently been hindered by external factors. Its heavy reliance on the U.S. market means that changes in U.S. tariff policies and trade conditions, along with a slowdown in global energy investment, have had a direct impact on its performance.
SeAH Steel's exports to the U.S. account for approximately 30% to 38% of its total sales, making it one of the highest among domestic steelmakers. The market anticipates that SeAH Steel will need to maintain its long-term strategy for expanding in the global energy infrastructure market while reducing its dependence on the U.S.
SeAH Steel is identifying offshore wind power as a key growth area and is increasing investments in related projects. Earlier this year, it invested an additional 70 billion won in SeAH Wind, a company producing offshore wind substructures in the UK, marking its entry into the European offshore wind market. Currently, SeAH Wind is stabilizing its production, and while its short-term contribution to performance is limited, there are expectations that it will become a new growth driver as European offshore wind projects gain momentum.
An industry insider noted, "SeAH Group's cousin management is continuing smoothly without major disruptions, but since both companies operate in the steel industry, the market inevitably compares them. When conditions are favorable, the differences between the businesses are less pronounced, but as market uncertainties grow, the competitiveness of their business structures and portfolios will increasingly dictate their performance."
* This article has been translated by AI.
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