SeAH Steel Holdings(003030) saw revenue expand in the second quarter this year on increased exports of oil pipelines and oil country tubular goods to North America, but swung to a loss after recognizing a one-off provision tied to facility investments to respond to global offshore wind projects.
SeAH Steel Holdings disclosed on the 14th that, on a consolidation basis, operating loss came to 50.7 billion won in the second quarter this year, swinging to a loss from the same period a year earlier.
Revenue was 1.1669 trillion won, up 14.3% from 1.0209 trillion won a year earlier. Net loss was 74.6 billion won, turning to a loss from a net profit of 45.5 billion won a year earlier.
The drivers of SeAH Steel Holdings' revenue growth were increased North American export volumes of oil pipelines and oil country tubular goods. SeAH Steel Holdings said drilling activity in the United States continues to show signs of expansion.
Second-quarter operating profit turned to a loss from a year earlier as facility investment costs to respond to global offshore wind projects were reflected as a one-off provision.
SeAH Steel Holdings said SeAH Wind's depreciation expenses for facilities and reasonably estimable future costs to respond to the "Norfolk Vanguard project" were recognized in advance as a one-off provision. Norfolk Vanguard is a global project to build a large-scale offshore wind farm in southeastern England.
SeAH Steel Holdings said, "We expect that recognizing this provision will resolve much of the uncertainty surrounding the large expense," adding, "Revenue from the Norfolk Vanguard project is expected to be recognized from the second half of this year."
Looking ahead, SeAH Steel Holdings expects North American exports of oil pipelines and oil country tubular goods to maintain a positive trend.
A SeAH Steel Holdings official said, "With the expansion in drilling activity continuing, we expect a favorable environment to persist in the second half for both demand and prices for oil well pipes and oil pipelines." The official added, "We plan to enhance market competitiveness by promoting facility and quality improvements at our U.S. manufacturing subsidiary (SSUSA)."