2007 1Q Dongkuk Steel Results

2

This presentation has been prepared solely for the purpose of

offering investors an understanding of the company’s expectations

before auditing.

Any forward-looking statements appearing in this material are

subject to various risks and uncertainties, and may be changed

without prior announcement.

This memorandum is not intended to be an offer, or a solicitation

of any offer, to buy or sell the securities mentioned herein.

Dongkuk Steel Mill shall not be liable whatsoever for any loss,

direct or consequential, arising from any use of this memorandum

or its contents.

3

ⅠⅠ. Company overview. Company overview

5

Establishment

Development

Growth phaseⅠ

Growth phase II

Rebirth

� 1954 Establishment of Dongkuk Steel Mill

� 1963 First large-scale steel company in private sector (Busan)

� 1971 First manufacturing of steel plates in Korea (Busan)

� 1976 Completion of two 30-tonne EAFs (Incheon)

� 1991 Completion of 1m-tonne #1 plate mill (Pohang)

� 1993 Completion of Korea’s first 100-tonne EAF

� 1994 Permanent renunciation of strikes by labor union

� 1997 Completion of 140-tonne EAF, section mill, 1.5m-tonne

#2 plate mill (Pohang)

� 2003 Sales surpass W2t

� 2004 Sales surpass W3t ; market cap surpasses W1t

� 1988 Listed on Korea Stock Exchange (IPO)

Timeline

6

Incheon plant

Seoul (Headquarters)

Pohang plant

Busan plant

South Korea

1,120170

Total

Section

Rebar

Heavy plate 2,470--2,470

2,050

5,640

2,850

Total

2901,5103,840Re-rolled

130820

1201,380550

-1,5601,290Steel making (crude steel)

BusanIncheonPohang(1‘000 tonnes)

Japanbranch

US branch

Capacity

Raw

materia

(Scrap)l

Slab

(import)

Shanghai

office

Location

7

ProcessProcess

SlabSlab Reheating Rolling Cutting Marking Plate

ScrapScrap EAF1) LF2) Continuous casting Semi-finished product

Rolling ReheatingRebar Section

H-beam, angle, channel, flat bar,

and profile products

Notes: 1) EAF = Electric Arc Furnace2) LF = Ladle Refining Furnace

8

1,9581,958

2,3232,323

3,2673,2673,3133,313

15.1%15.1%

4.4%4.4%4.4% 5.7%5.7%5.7%

13.9%13.9%13.9%

9.7%9.7%9.7%

9%9%

11.1%11.1%12.3%12.3%

Operating ProfitNet IncomeNet Income

200520032002 2004 2006

7.0%7.0%7.0%

8.3%8.3%

3,0353,035

Earnings for the last 5 yrs

(Unit : bil. won)Earnings for the last 5 yrsEarnings for the last 5 yrs

SalesSales

9

20002000 � Share buyback: April~December (9,644,766 shares @ W3,101/share)

20012001 � Share buyback: January (362,990 shares @ W2,375/share)

20022002� Share buyback: March~May (4,000,000 shares @ W5,993/share)

� Share buyback: October~November (4,000,000 shares @ W5,008/share)

20032003 � Share buyback and cancellation completed on Jul 30 (2,756,710 shares @ W4,905/share)

20042004 � Share buyback and cancellation completed on Aug 11 (2,300,000 shares @ W9,748/share)

20062006 � Share cancellation completed on Nov 24 (10,000,000 shares @ W4,085/share)

Share buyback history

10

Shareholder Structure

Note 1): JFE Steel increased their stake to 14.88% as of Dec. 21,2006.

Note 2): JF Asset Management reported a 7.30% holding on Mar. 15, 2007.

Related Parties

Treasury Shares(0.8%)

43.7%28%28% Foreign investors1)2)

27.5%

Others

Shareholder structure (as of Mar. 31, 2007)

Stock Price TrendStock Price Trend

‘07 1Q

‘06‘05‘04‘03‘02

5,261 11,249 17,875 18,238 22,099

year

원

Avg.price →0

5,000

10,000

15,000

20,000

25,000

30,000

InformationInformation

61,329Outstanding

share5,000 wonPar

value

495Treasury

stock384bil wonCapital

61,824Numbers of

share1,607bil wonMarket

cap

as of Mar. 31, 2007

1,000 shares1,000 shares

ⅡⅡ. 2007 1Q Results. 2007 1Q Results

12

50

0

74

124

246

401

470

1,117

1,241

1,241

663

2006

1Q

YOY

-3

0

-19

-22

41

81

96

218

196

196

74

Amount

47

0

55

102

287

482

566

1,335

1,437

1,437

737

2007

1Q

Export

Domestic

Section

Rebar

Plate

Subtotal

Section

Rebar

Plate

Subtotal

Total

Products

Steelmaking

-6

0

-25.7

-17.7

16.7

20.2

20.4

19.5

15.8

Sales

15.8

11.2

Production

%Item

(Unit: 1.000ton)

Production/Sales volume

� PlateFirm domestic demand led to sales volume increase

� Long Products Despite the delay of construction market recovery, stable sales maintained

200

300

400

500

600

700

Plate Rebar Section

06 1Q 07 1Q

1.000 ton

13

Income statement

Equity Method

Foreign currency

translation

34.7

50.2

-8.2

-5.9

-15.2

-26.0

76.2

708.3

828.3

2007

1Q

-130.7-25.119.2

-345.2-21.46.2Foreign currency

transactions

29.93.5-11.7

42.5

62.4

4.8

57.5

596.1

680.8

2006

1Q

YOY

-7.8

-12.2

-30.8

18.7

112.2

147.5

Amount %Account

-18.4

-19.6

-641.7

32.5

18.8

21.7

Net Profit

Ordinary Profit

Non-Operating

Income

Operating Profit

COGS

Sales

� Sales revenueDue to the product price raise and sales volume increase, sales revenue went up by 21.7%

� COGSScrap price rise with input volume of raw material increase

� Non-operating incomeWon denomination affected to the fxitem

0

200

400

600

800

1,000

1,200

06 1Q 07 1Q

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

OP Sales Revenue

9.2%

8.4%

SalesOP(Unit : bil. Won)

14

82.2%

1,732.8

421.2

2,154.0

654.2

160.2

589.5

1,115.6

1,769.8

2,208.0

1,715.8

3,923.8

2006

92.4%92.4%

1,731.0

421.2

2,152.2

561.8

260.2

607.4

1,426.0

1,987.8

2,214.6

1,925.4

4,140.0

07 1Q

0.1-1.8Etc.

Equity

62.4100.0(Current Debt)

14.1-92.4Fixed

27.8310.4Current

10.2%

0.00Paid-in Capital

0.1-1.8Total

Debt / Equity Ratio

3.017.9(Short-term)

12.3218.0Total

Liabilities

0.36.6Fixed

12.2209.6Current

5.5216.2Total

Assets

%Amount

QOQAccount

Balance sheet

� Assets

Increase on cash and cash equivalent

� LiabilitiesChange of fixed debt to current debtSlight increase on short-term debt with raw material cost hike

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

1,000 bil won

Asset Liabilities Capital

Dec. 2006 2007 1Q

(Unit : bil. Won)

ⅢⅢ. Business Activity. Business Activity

16

Steel IndustrySteel Industry Demand MarketDemand Market

Market Overview

Global - Sharp rise of new vessel price - Stable volume prospected until 2015Korea

- Maintaining the competitive edge from increase in high value-added ship demand and improvement of shipbuilding technology

China- Market share increase with the Chinese

shipbuilder’s growth (‘00 8.9% → ‘06 14.8%)

Shipbuilding plate- Tight condition in supply-demand side

with securing 4 year booking - Plate use increase of small-middle sized

shipbuilders in terms of their gradual growth

Construction plate- Recovery of public construction site- Demand for heat treated grade plate increased due to boom in construction relating to oil facility

Rebar- Stable level expected on both of volume

and revenue- Production decrease forecasted with the

effect of billet price increase

H-Beams

- Volume increase forecasted with constant domestic demand and growth of export

Korea- Slightly solved polarization of economic

sentiment

- Positive expectation to the construction companies with growth of SOC business and kick-off of administration complex city

China- Strengthening the government’s

regulation over the steel oversupply

17

Issues in DKIssues in DK

Purpose : Securing internal slab

production process

Location : Ceara State, Brasil

Production : 1.5mil tonnes/year

Internal Use : 0.75mil tonnes/year

Joint Venture Partners :

CVRD,Danieli

CearaCeara Steel Steel JV InvestmentJV Investment

3D Airview of Ceara Steel

Upgrade of TMR

- Extending the thickness to 50T

- Developing TMR for ESW(Electro

Slag Welding)

Developing H400

- Diversifying the size of H-Beam to meet the buyer’s needs- Acquiring competitiveness on sales with the various sized products

Rebar for LNG- Seeking for a niche market with the strategic product- Making an effort to meet the buyers’requirement

Building a New Plate MillBuilding a New Plate Mill Product DevelopmentProduct Development

Plate Mill (Rolling)

Purpose : Product portfolio upgrade

due to the value added plate product

Location : Dangjin, Korea

Production : 1.5mil tonnes/year

Completion : Sep. 2009

Business Partner : JFE Steel

- Set to have Technology transfer to

produce TMCP plate from JFE

18

DK NEWS for 1Q

Made a contract with SMS-Demag to have Work Roll Shift System for the first time in Korea

Introduction of plate work roll shift (3/21)Introduction of plate work roll shift (3/21)

Held the groundbreaking ceremony

Actual construction expected in the 1st half

Groundbreaking of shipping yard in Dangjin (3/26)Groundbreaking of shipping yard in Dangjin (3/26)

Made partnership agreement with 18 partner companiesSupport for the partner companies’ security and health carePassing down industrial accidents prevention know-how

Coexistence partnership agreement (3/15)Coexistence partnership agreement (3/15)

Completed DK business innovation system (2/28)Completed DK business innovation system (2/28)Integrated system including drawing up strategy , demand, production, supply, planning and execution

Built both of ERP, MES (Manufacturing Execution System) simultaneously for the first time in Korean steel industry

Cost reduction by 200 bil won expected from customer focusing and inventory reduction

Launching H400 Series (3/22)Launching H400 Series (3/22)

Outline

New H-beam H400 and H350 series

Seeking differentiation with Chinese H-beams

Making H-beam quality exclusive

Purpose and UseUse to the high-rise and huge building

Demand increase on the bigger size of

H-beam in the construction and distributor’s market

Direction

Development of family size of H400 series

19

ⅣⅣ. Prospect. Prospect

20

ImportProductionExportApparent

ConsumptionDemand

Products

1,470

915

3,685

0.7

0.80

4.9

YOY

1.1

4.2

-6.0

YOY

1.3

0.5

4.8

YOY

1.2

0.6

3.7

YOY

2.84,7051,4804,6956,175Section

-1.810,10025010,76511,015Rebar

4.66,4059509,14010,090Plate

YOY

8,594

9,729

5,700

6,4056,103

10,090

(Unit : 1,000ton, YOY %)※ ref. from KOSA (Korea Steel Association)

PlatePlate

10,345

10,951

9,483

10,10010,019

11,015

RebarRebar

5,329

6,100

4,634

4,7054,670

6,175

SectionSection

DemandDemand ProductionProduction

Forecasts

2005 2006 2007 2005 2006 2007 2005 2006 2007

21

5.5167.93,203.23,035.3Sales (bil. Won)

4.8561,2251,153Section

3.6641,8501,786Rebar

-0.6-162,4652,481Plate

1.91045,5405,436Total

Sales

2.01085,5175,408Products

-0.3-102,8642,873SteelmakingProduction

%Amount

Change2007(F)2006Item

(Unit : 1,000ton)

Business Plan for 2007

22

DongkukDongkuk Steel, who made the shipbuilding plate for the first time in KoSteel, who made the shipbuilding plate for the first time in Korearea--

We jumped into the world to make it better with this pioneer spiWe jumped into the world to make it better with this pioneer spirit.rit.

Now the passion of us is making it real from Now the passion of us is making it real from CearaCeara Steel in Brazil to Steel in Brazil to DangjinDangjin plate mill, plate mill,

as we have the competitiveness to be the global top leader in thas we have the competitiveness to be the global top leader in the plate making industry.e plate making industry.

Actual image of DKActual image of DK’’s shipbuilding plates shipbuilding plate

DKDK’’s plate making technology, s plate making technology,

thick enough to make the world surprise!thick enough to make the world surprise!

This Chinese letter This Chinese letter

indicates something indicates something ““thickthick””. .

Plate is translated into the Plate is translated into the

meaning of meaning of ““thick platethick plate”” in in

Korean.Korean.