Dongkuk Steel Mill Co, South Korea's third-largest steelmaker has returned to making profit in the first quarter of 2019. The main reason was due to reduced valuation loss form its Brazilian Steel mill which they have a large amount of stake in.
For the period January-March, net profit was 700 million won (US$588,000) in contrast to a loss of 39 billion won the previous year.
Even though their sales fell 1.9% to 1.37 trillion won, operating profit soared 135% to 48 billion
Despite the sales decline, the company said the rise of long steel prices and solid demand for steel plates enhanced its profitability.
Dongkuk Steel said reduced valuation loss from their shareholdings in Companhia
Siderurgica do Pecem (CSP) steel mill in Brazil also improved its bottom line. Dongkuk Steel owns a 30-percent share in CSP, while South Korea's leading steelmaker, POSCO, and Brazil-based mining giants Vale S.A. have 20-percent and 50-percent shares, respectively.
Dongkuk Steel said earlier this week it will inject $150 million over the next three years into CSP to help its financial standing.