[Alpha Biz= Kim Jisun] Young Poong is facing a deepening profitability crisis after posting a third consecutive year of operating losses, driven by a sharp drop in utilization at its core Seokpo smelter and rising environmental costs.

According to its 2024 business report, Young Poong recorded an operating loss of KRW 259.6 billion, widening by about KRW 100 billion year-on-year despite a slight increase in revenue to KRW 2.909 trillion.

The downturn was primarily attributed to a steep decline in smelter utilization, which fell to 45.95% from 80.03% a year earlier. The drop reflects a 58-day suspension of operations between February and April due to environmental violations. Lower utilization significantly increased fixed cost burdens, while production volumes also declined, with zinc and sulfuric acid output both falling.

Environmental-related provisions surged 45% to KRW 374.3 billion, adding further pressure on earnings. Additional uncertainty remains as the company is currently engaged in litigation over further potential suspension orders.

Market sentiment toward Young Poong has weakened, with its price-to-book ratio (PBR) hovering around 0.3x, among the lowest on the market. Only one of its 36 executives holds company shares, raising concerns over governance alignment.

The company is also facing financial strain from its involvement in a management control dispute over Korea Zinc alongside MBK Partners, with potential additional stake purchases expected to increase funding pressure.

 

 

 

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