Dongkuk Steel Mill Co., South Korea's third-largest steelmaker, said Thursday that its net losses widened in the third quarter from a year earlier due to losses from equity ties with a struggling Brazilian plant.
Net loss for the July-September quarter deepened to 60.1 billion won (US$51 million) from 8.3 billion won a year earlier, the company said in a statement.
Sales dropped 4.7 percent on-year to reach 1.4 trillion won in the third quarter on a consolidated basis, but operating profit increased 7.7 percent on-year to 56.7 billion won.
Dongkuk Steel said losses from its equity ties with Companhia Siderurgica do Pecem (CSP) steel mill in Brazil dragged down its third-quarter bottom line.
CSP posted an operating loss of 19.8 billion won in the third quarter due to a slump in its slab business. Dongkuk Steel owns a 30-percent stake in CSP.
Dongkuk Steel also blamed the currency losses for the weak earnings. The Korean won fell to an average of 1,193.24 against the U.S. dollar in the third quarter, from 1,121.59 a year ago, according to the Bank of Korea. The weakened local currency jacked up the cost of purchasing raw materials from overseas.
In the first nine months, Dongkuk Steel's losses amounted to 38.8 billion won. Sales reached 4.3 trillion won, while its operating profit was tallied at 184.2 billion won.(Yonhap)