Dongkuk Steel Mill

Transcription

1 Dongkuk Steel Mill

2 Index I. Company overview II. III Q3 results Milestones & Market overview IV. Forecasts 2

3 Ⅰ.. Company overview 3

4 Timeline Establishment (1954~1970) 1954 Establishment of Dongkuk Steel Mill 1963 First large-scale steel company in private sector (Busan) Development (1971~1980) 1971 First manufacturing of steel plates in Korea (Busan) 1976 Completion of two 30-tonne EAFs (Incheon) Growth phase I (1981~1990) 1988 Listed on Korea Stock Exchange (IPO) Growth phase II (1991~2000) 1991 Completion of 1m-tonne #1 plate mill (Pohang) 1993 Completion of Korea s first 100-tonne EAF 1994 Permanent renunciation of strikes by labor union 1997 Completion of 140-tonne EAF, section mill, 1.5m-tonne #2 plate mill (Pohang) Rebirth (2001~ ) 2003 Sales surpass W2t 2004 Sales surpass W3t ; market cap surpasses W1t 4

5 Offices and Steel Works South Korea Incheon plant Seoul (Headquarters) Shanghai office US branch Pohang plant Japan branch Busan plant Capacity (1,000 ton) Pohang Incheon Busan Total Steel making (crude steel) 1,290 1,560-2,850 Re-rolled Total 3,840 1, ,640 Heavy plate 2, ,470 Rebar 550 1, ,050 Section ,120 Slab (import) Raw material 5

6 Process Slab Reheating Rolling Cutting Marking Plate Scrap EAF 1) LF 2) Continuous casting Semi-finished product Rebar Section Rolling Reheating H-beam, angle, channel, flat bar, and profile products Notes: 1) EAF = Electric Arc Furnace 2) LF = Ladle Refining Furnace 6

7 Results (for the last 5 years) Sales Operating profit 1,544 1,785 CAGR 16.5% 1,958 2,323 3,267 3,313 (Wb) Production I/S (Wm) Financial ratios Dividend Steel making ( 000 tonnes) Finished steel ( 000 tonnes) Sales Operating Income Ordinary Income Net Income Operating profit margin (%) Debt/equity ratio (%) DPS (Won) Dividend yield* (%) ,620 5,190 1,785, ,837 24,343 14, ,757 5,506 1,957, , ,162 86, ,850 5,640 2,323, , , , ,971 5,555 3,267, , , , ,737 5,335 3,312, , , , Note: * Dividend yield = dividend / yearly average share price 7

8 Share buyback history 2000 Share buyback: April~December (9,644,766 W3,101/share) 2001 Share buyback: January (362,990 W2,375/share) 2002 Share buyback: March~May (4,000,000 W5,993/share) Share buyback: October~November (4,000,000 W5,008/share) 2003 Share buyback and cancellation completed on Jul 30 (2,756,710 W4,905/share) 2004 Share buyback and cancellation completed on Aug 11 (2,300,000 W9,748/share) 2006 Share cancellation completed on Nov 24 (10,000,000 shares 4,085@ W/share) 8

9 Shareholder structure Shareholder structure (as of Nov. 30, 2006) Related parties 26.8% Foreign investors 1) 26.2% Treasury stock 12.7% Others 34.3% Note 1): Capital Research & Management Co (CRMC) reported a 5.89% holding on Mar.30, Original number of shares Cancellations Treasury stock Current shares outstanding 61,824,290 15,056,710 (2003~2006) 7,862,186 53,962,104 9

10 Ⅱ Q3 Results 10

11 Income statement (Wb) Accont Q2 06 Q3 06 Q3 06 Accumulated Q3 05 Chg. Amount % Sales , , COGS , , Operating Profit Non-Operating Income Foreign currency transactions Foreign currency translation Equity Method Ordinary Profit Net Profit

12 Balance sheet (Wb) Q2 06 Q3 06 Dec. 05 Chg Amount % (Wb) Total 3, , , Assets Current 1, , , Fixed 2,180 2, , Total 1,896 2, , Current 1, , , Liabilities (Short-term) (Current Debt) Fixed Total 1, , , Equity Paid-in Capital Etc. 1, , , Debt / Equity Ratio 97.3% 107.7% 108.9% 10.4% 12

13 Ⅲ.. Milestones 13

14 Milestones Innovation PI/ERP Establishment - Kick-off of the ERP Users training course, System scheduled to be open in Dec. DOS3 (Dongkuk Success Strategy) Project TFT - Support for projection of steel industry and the future business stragegy Cooperation MOU on DK-JFE cooperation extention - Cross shareholding (JFE will buy more of DK s stock to 15%) - Stable slab procurement, - Sharing of technology Core Human Resource Kick-off of 2 nd DK MBA Opening of group Recruiting System : Operating human resource DB Development Winning the Korea best enterprise(1 st metal division) for 2 consecutive years Met the 2 mil tonnes production in Busan Works Regular maintenance work at section mill - Remodeling of facility to produce H400 series 14

15 Issues Ceara Steel JV Investment Purpose : Securing internal slab production process Location : Ceara State, Brasil Production : 1.5mil tonnes/year Internal Use : 0.75mil tonnes/year Joint Venture Partners : CVRD,Danieli Rationalization of TMR plate Purpose - Extension of production range in 2 nd plate mill (6~35T 6~55T) *Installation in 2008 Range of facility investment - Replacement of FM Main Motor - Replacement of hot leveler DK Group R&D Center Development on New Products - Development of value added products - Create the strategic steel grade Establishing the information management system throughout DK Group - Sharing the technological information among the affilates - Knowledge Management System 3D Airview of Ceara Steel Plate Mill (Rolling) Plate Mill (Finished Plate Products) 15

16 Ⅳ.. Forecasts 16

17 Forecasts for H2 (unit : 1000ton, %) Demand Supply Item Apparent Comsumption Exports Total Demand Production Imports % % % % % Section 2, , , (H-Beam) 1, , , Rebar 4, , , Plate 4, , , , Ref.) KOSA, Jun

18 Production & Sales (2006 Forecast) (1,000 ton) Chg Chg (%) Production Steel making 2,737 2, Finished steel 5,335 5, Sales volume Total 5,307 5, Heavy plate 2,469 2, Rebar 1,680 1, Section 1,158 1, Sales (Wb) 3, , Our forecasts are for internal use (and therefore subject to change) and are not intended to be an offer to buy or sell the securities mentioned herein. 18

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