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Photo courtesy of Young Poong |
[Alpha Biz= Kim Jisun] Young Poong posted an operating loss of KRW 259.2 billion in 2025, as the impact of a production suspension at its core facility, the Seokpo Smelter, coincided with a prolonged industry downturn, according to market analysis.
With environmental risks surrounding the Seokpo Smelter continuing to draw criticism from lawmakers, political circles, and civic groups, resolving environmental issues while restoring competitiveness in its core smelting business through portfolio optimization has emerged as Young Poong’s most pressing challenge.
According to disclosures filed with the Financial Supervisory Service on February 22, Young Poong’s consolidated revenue for 2025 reached KRW 2.909 trillion, a slight increase from KRW 2.786 trillion in 2024. However, the company recorded an operating loss of KRW 259.2 billion, widening by KRW 98.5 billion from the KRW 162.1 billion loss posted in 2024. This marks the company’s third consecutive year of annual operating losses.
The weak performance is largely attributed to environmental risks associated with the Seokpo Smelter. The facility was subject to a 58-day administrative shutdown from February 26 to April 24 last year after being found in violation of the Water Environment Conservation Act due to wastewater leaks and the installation of unauthorized pipelines. Additional issues—including breaches of integrated environmental permit conditions and failure to comply with soil remediation orders—are believed to have further undermined productivity.
As a result of the suspension, the average operating rate of the Seokpo Smelter fell to 40.66% during the January–September period last year, down 12.88 percentage points from 53.54% in the same period of 2024.
Industry sources note that the decline in utilization rates, combined with unfavorable market conditions, weighed heavily on earnings. Analysts also point out that Young Poong’s efforts to diversify its smelting-focused business portfolio have yet to meet expectations, limiting the company’s ability to rebound.
According to Young Poong’s third-quarter 2025 report disclosed in November last year, zinc ingot products accounted for KRW 593.9 billion, or 81%, of cumulative smelting segment revenue of KRW 732.7 billion during the first three quarters. The company was adversely affected by falling treatment charges (TCs) and weak zinc prices.
Meanwhile, concerns over the credibility of Young Poong’s financial disclosures have added to investor unease. In January, a residents’ countermeasures committee in Bonghwa County filed a complaint with the Seoul Central District Prosecutors’ Office against Young Poong, its controlling shareholder Jang Hyung-jin, and CEO Kang Sung-doo, citing environmental liabilities.
According to the committee, the minimum remediation cost for the Seokpo Smelter reported by the Ministry of Climate, Energy and Environment to the National Assembly amounts to KRW 299.1 billion, while Young Poong has recognized only KRW 203.5 billion in restoration provisions—an alleged understatement of nearly KRW 100 billion. The committee further claimed that Young Poong’s reported net profit of KRW 25.3 billion for the first half of 2024 would have turned into a loss exceeding KRW 70 billion had the full remediation costs been properly reflected.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
