DL Q2 Earnings: Key Figures
DL reported Q2 2025 revenue of KRW 13.217 trillion, operating profit of KRW 72 billion, and a net loss of KRW 73.2 billion, significantly missing market forecasts. The net loss is particularly concerning, marking a substantial decline from the previous year.
Why the Underperformance?
- Struggling Auto Parts Business: Reduced orders due to growing pains in the electric vehicle market continued to impact performance.
- Declining Manufacturing Profitability: Global demand weakness and oversupply led to decreased profitability.
- Energy Sector Headwinds: The base effect of the Yeosu hydrogen power plant and potential unforeseen negative factors likely contributed to the poor results.
- Increased Financial Costs: Rising interest rates led to higher financial expenses.
External Factors
External factors such as fluctuations in the KRW/USD and KRW/EUR exchange rates, rising raw material prices, and global recessionary concerns also contributed to DL’s underperformance.
Investment Strategy: Proceed with Caution
In the short term, DL’s stock price is expected to face downward pressure. Long-term investors should consider DL’s growth potential, including high-value-added product development and expansion into renewable energy. However, managing risks related to the evolving EV market, raw material price volatility, and global economic slowdown is crucial. The impact of the Kraton Corporation acquisition should also be closely monitored. Investors should carefully review future disclosures, including detailed segment performance and management’s strategy, before making investment decisions. Sharp declines in the stock price may present buying opportunities, but portfolio diversification for risk management is essential.