Steelmaker Husteel's operating profit skyrockets 579% in first half

Shares of Husteel, the only public company within the golf course giant Shinan Group, have doubled in price in the last three months. 

Industry watchers say the positive turnaround is thanks to better corporate governance.

Husteel raked in 438.1 billion won ($316.7 million) in revenue and posted an operating profit of 98.5 billion won ($71.2 million) in the first half of this year, according to its report filed to the Financial Supervisory Service.

The operating profit is its largest ever on a semi-annual basis 

Compared to the same period a year ago, revenue surged 71.6% and operating profit skyrocketed 579%. 

Founded in 1967, Husteel manufactures oil pipelines, plumbing pipes and more.

Husteel is the No. 2 manufacturer of plumbing pipes in South Korea, after SeAH Steel Holdings. 

The United States ramping up the oil pipeline infrastructure after the COVID-19 outbreak has increased Husteel exports.  

Revenue for Husteel USA, Inc. in the first half reached 202.2 billion won, and net profit was 57.1 billion won. 

Industry insiders expect Husteel's sales to grow further with the passing of the Inflation Reduction Act (IRA) passed by the US Congress and signed into law by President Joe Biden on Aug. 16. 

Husteel shares rose to as high as 8,420 won per share in the last 52 weeks, at their lowest trading at 2,660 won per share last November. 

Shinan Group acquired Husteel in 2001 when the steelmaker was under court receivership. 

The business group has eight golf courses and resorts under its umbrella.

Samsung Group has the most number of golf courses in South Korea, followed by Shinan Group and Booyoung Group. 

In addition to golf courses, the group also owns Hotel Riviera Cheongdam, Shinhan Engineering & Construction, Baro Savings Bank and Shinan Capital.

The parent company faced serious backlash after it involved Husteel in its M&A efforts for resort facilities. 

Back in 2011, Husteel purchased a 25.8% stake in Welli Hilli Park for 16 billion won by joining forces with Shinan Group’s other affiliates. 

Minority shareholders were of the view that investing in leisure businesses hinders shareholder rights. 

There has been constant noise surrounding Park Sun-seok, the largest shareholder of the steel pipe maker and the chairman of Shinan Group.

Park was embroiled in illegal gambling abroad and mediating advance loans. 

Chairman Park’s son, Park Hoon took the helm of Husteel in 2016 and has received positive feedback from industry insiders over the years. 

Write to Ik-Hwan Kim at lovepen@hankyung.com
Jee Abbey Lee edited this article.