Steelmaker Posco Vietnam posts $30 mln loss in 2022  

Posco Vietnam Co., Ltd., a wholly-owned subsidiary of South Korean steelmaker Posco Holdings, recorded a net loss of KRW39.73 billion ($30.44 million) in 2022 against a net profit of KRW42.19 billion ($32.44 million) in 2021.

Posco Vietnam posted a sales revenue of KRW855.6 billion ($680.86 million) in 2022, down 26.14% year-on-year from KRW1,199 billion ($921.78 million) in 2021, according to financial reports released by the parent company.

The Posco Vietnam Processing Center, another subsidiary responsible for machining, marketing and merchandizing steel products for Posco in Vietnam, posted a net profit of KRW4.93 billion ($3.79 million) on a sales revenue of KRW783.75 billion ($602.56 million) in 2022.

The net profit marked a 79% decrease year-on-year from KRW23.56 billion ($18.11 million) in 2021, but sales revenue rose 28.69% from KRW609.03 billion ($468.23 million).

The South Korean conglomerate’s trading subsidiary, Posco International Vietnam, posted a net profit of KRW788 million ($0.61 million) in 2022, down 76.24% from KRW3.32 billion ($2.55 million) in 2021. Sales revenue dropped 44.95% to KRW280.69 billion ($215.8 million) in 2022 from KRW509.87 billion ($392 million) in 2021.

Globally, Posco recorded a revenue of KRW85,004 billion ($65.38 billion) in 2022, up 11.83% year-on-year.

Posco is among the biggest South Korean investors in Vietnam. It has invested about $2 billion in the country and will continue expanding, Posco Vietnam CEO Yoon Chang Woo said at a forum on Vietnam-South Korea economic cooperation in October 2022.

Posco’s first large investment was a factory in the southern coastal province of Ba Ria-Vung Tau. The plant, opened in 2006, is Southeast Asia’s largest cold-rolled mill with an annual capacity of 1.2 million tons.

Meanwhile, Posco Yamato Vina Steel (PY VINA), a joint venture established in 2010 by Posco and Japan’s Yamato group, has a factory in Ba Ria-Vung Tau province with a yearly capacity of one million tons.

Posco VST, established 2009 in the southern province of Dong Nai, has an annual production capacity of 250,000 tons of stainless cold rolled steel.

Posco’s underperformance in Vietnam happened in tandem with other major steelmakers in the country.

Formosa Ha Tinh Steel, invested in by Taiwan’s Formosa Plastics Group, posted a loss of TWD10 billion ($322 million) in 2022, according the parent company's annual report. The steelmaker’s 2022 revenue dropped 15.7% year-on-year to TWD124.5 billion ($4.02 billion).

Formosa Ha Tinh attributed the loss to a combination of factors including the development of new steel varieties for export to Europe and South America and the dampening of investment and consumption in general and global steel in particular as a result of the U.S. Federal Reserve's interest rate hikes.

Hoa Phat Group, the largest Vietnamese steelmaker, recorded a post-tax profit of VND8.4 trillion ($358 million) in 2022, down 76% year-on-year. The group posted a revenue of VND142 trillion ($6.06 billion), down 5% year-on-year. Its Q4/2022 revenue of VND26 trillion ($1.11 billion) marked a 42% year-on-year fall.

Hoa Sen Group, Vietnam's leading steel sheet producer, reported an after-tax profit of VND251 billion ($10.7 million) in the fiscal year 2021-2022 (October 1, 2021 to September 30, 2022), down 94% year-on-year and fulfilling just 10% of its target. The group's net revenue reached VND49.71 trillion ($2.12 billion), up 2% and fulfilling 16.7% of the target, according to its consolidated financial statement.