Subsidiary DB World Temporarily Suspends Ferroalloy Business Due to Steel Industry Downturn... 28.9% Sales Drop Expected but Financial Structure Improvement Anticipated

Subsidiary DB World decided to temporarily suspend its ferroalloy business, effective from September 30, 2026
The suspended amount is 40.06 billion KRW, representing 28.9% of parent DB HiTek's 2025 consolidated sales (138.74 billion KRW), leading to inevitable short-term revenue decline
Reason for suspension: prolonged steel industry downturn and accumulated losses; measures to reduce fixed costs and improve financial structure
DB World's total assets are 558.88 billion KRW, accounting for 18.7% of parent's consolidated assets (2.99 trillion KRW)
Despite temporary revenue drop, suspension of loss-making division is expected to enhance profitability, cash flow, and debt ratio
[AI Comprehensive Analysis]This temporary suspension is a negative event due to short-term revenue loss, but it is a strategic decision to improve long-term profitability by halting a loss-making business. However, as the division accounts for about 29% of total sales, negative impact on future performance is expected, and uncertainty remains until the steel industry recovers.