SeAH set for record earnings on steel supercycle, offshore wind projects

SeAH Group, a South Korean mid-size special steel conglomerate, is set to post record earnings this year on the back of the global steel supercycle and its renewed focus on offshore wind power projects.

SeAH Besteel Corp. and SeAH Steel, the two flagship units of the group, have been performing well, riding on growing demand for steel from automakers, machine tool manufacturers and other companies alongside the recovery of the global economy from the pandemic.

The SeAH companies are also expected to benefit from booming renewable energy projects, including offshore wind turbine substructures and hydrogen facilities.

According to the local steel industry on Sunday, SeAH Holdings Corp., the parent of SeAH Besteel, posted an operating profit of 230 billion won ($196 million) in the first nine months of the year.

SeAH Besteel, which produces stainless steel, carbon alloy steel and other special steel products, reported an operating profit of 119.3 billion won in the same period.

SeAH Besteel controls more than 40% of the domestic market for specialty steel used in automobiles and various machinery.

SeAH Changwon Integrated Special Steel Corp. (SeAH CSS), a wholly owned subsidiary of SeAH Besteel, posted 81 billion won in operating profit in the first nine months of the year.

Given the strong global steel demand, SeAH Holdings’ operating profit is certain to surpass 300 billion won for the full year, the highest in a decade, analysts said.

TWO HOLDING COMPANIES

Meanwhile, SeAH Steel Holdings Corp., another holding company under the group for SeAH Steel and other affiliates, is expected to run a record 2021 operating profit exceeding 200 billion won.

SeAH Group was founded in 1960 by brothers Lee Woon-hyung (former chairman) and Lee Soon-hyung (current chairman). In 2018, the group was transformed into two holding entities: SeAH Holdings Corp. and SeAH Steel Holdings Corp.

Lee Tae-sung, son of the former chairman, runs SeAH Holdings, while Lee Joo-sung, son of the current chairman, oversees SeAH Steel Holdings.

The two holding companies posted a combined operating profit of 410 billion won in the first nine months of the year, eight times their combined profit of the entire 2020.

The group’s operating profit will exceed 500 billion won this year, industry watchers said.

WIND POWER PROJECTS

The group’s spectacular earnings prospects are also boosted by affiliates’ aggressive foray into the offshore facility business.

SeAH Steel Holdings said last year it will invest 400 billion won over the next three years to build the world's biggest monopile facility for offshore wind turbines in the UK.

A monopile is a steel tube that serves as a fixed foundation for an offshore wind turbine.

SeAH Steel Holdings said it plans to kick off commercial monopile production in the first quarter of 2023, and sell over 100 monopiles every year -- almost half of the UK's monopile demand – to raise 500 billion won in annual revenue.

Meanwhile, SeAH Besteel is supplying components, called fasteners such as bolts and nuts, for offshore projects.

Industry officials said Lee Tae-sung and Lee Joo-sung, who run SeAH’s two holding companies, will push for offshore wind power projects and electric vehicle motors among other segments as the group’s core businesses for future growth.

Write to Kyung-Min Kang at Kkm1026@hankyung.com
In-Soo Nam edited this article.