Southern Steel(SLND) 'Massive Losses' vs Waston Steel(WS) Mergers and Acquisitions… Divergence in Performance in the U.S. Infrastructure and Steel Industry

The overall infrastructure and steel industry in the United States is experiencing simultaneous performance fluctuations and strategic restructuring. Major companies such as Southland Holdings (SLND), Worthington Steel (WS), and Sky Harbour (WS) are showing a pattern of significant losses interwoven with structural adjustments, mergers, and expanded growth investments, seeking potential recovery amidst “mixed performance.”

Southland Holdings (SLND) reported fourth-quarter sales of $104 million (approximately 1.498 trillion won) for 2025, a sharp decrease of 61.1% year-on-year, with total losses reaching $193.4 million (approximately 278.4 billion won). Meanwhile, the net loss for the same period was $216.4 million (approximately 311.5 billion won), resulting in a loss per share of $4.00. On an annual basis, sales also fell by 21.2% to $772.2 million (approximately 1.1118 trillion won), with a net loss of $306.5 million (approximately 441.4 billion won).

The deterioration in performance was primarily influenced by a significant “one-time charge” of $135.8 million (approximately 195.6 billion won) related to a court ruling concerning the Washington State Convention Center. However, the company secured a backlog of orders amounting to $2.03 billion (approximately 2.9232 trillion won) and completed $116 million in guarantee support, along with a structural adjustment involving the assumption of $110 million in debt by the guarantor.

The company also won a new project worth approximately $118 million (about 169.9 billion won) through its subsidiary Oscar Renda Contracting. This project consists of a data center cooling system ($48 million), pump station expansion ($40 million), and reservoir and water pipeline projects ($30 million), most of which are targeted for completion in 2026-2027. Industry commentary noted, “Despite short-term losses, the ‘order base’ remains robust.”

In contrast, Worthington Steel (WS) exhibited an opposite trend. In the third quarter of fiscal year 2026, sales grew by 12% to $769.8 million (approximately 1.1085 trillion won), but operating profit plummeted to $3.1 million (approximately 4.5 billion won). However, adjusted EBIT recorded $20 million (approximately 28.8 billion won), successfully maintaining profitability.

The company is advancing its acquisition of Germany’s Kloeckner (Kloeckner & Co SE), continuing its “aggressive acquisition strategy.” The cash offer of €11 per share reflects a premium of about 98% and lowers the minimum required ownership for acquisition to 57.5%. According to March data, the company has secured 56.9% of the shares, being assessed as practically close to completing the acquisition. The acquisition is expected to be finalized in the second half of 2026.

From a financial perspective, the company reported cash of $90 million (approximately 129.6 billion won) and net debt of $161.4 million (approximately 232.3 billion won). Additionally, it maintained a quarterly dividend of $0.16 per share, continuing its shareholder return policy. Market analysts believe, “Though profits have decreased, the ‘scale expansion strategy’ is clear.”

Sky Harbour (WS), on the other hand, presented the most striking “growth story.” In 2025, sales increased by 87% year-on-year, with development and construction assets exceeding $328 million (approximately 472.3 billion won). Operating cash outflow was $2.3 million (approximately 3.3 billion won), significantly reduced year-on-year, and the company successfully reached breakeven by year-end.

Notably, the operating group’s sales grew by 49%, with operating cash inflow reaching $15.7 million (approximately 22.6 billion won). The company successfully secured a credit line of $200 million from JPMorgan and issued $150 million (approximately 216 billion won) in bonds at a 6.00% interest rate, strengthening its “liquidity base.”

This series of performance releases and strategic changes reflects the structural environment facing U.S. infrastructure and industrial companies. Despite short-term performance fluctuations due to factors such as interest rate burdens, project risks, and rising costs, the trend of reinforcing “mid- to long-term growth strategies” through large order acquisitions, mergers, and asset expansion is becoming increasingly evident.

Commentary: Compared to short-term profit and loss, backlog of orders, merger activities, and cash flow improvements are becoming the core variables determining the future direction of stock prices.