Dongkuk Steel Mill

June 2005

This presentation has been prepared solely for the purpose of offering investors an understanding of the company’s expectations.

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. DongkukSteel Mill shall not be liable whatsoever for any loss, direct or consequential, arising from any use of this memorandum or its

contents.

IndexIndex

I. Company overview

II. 1Q 2005 results

III. 1Q milestones

IV. Demand forecast by product

V. 2005 forecasts

I Company overviewCompany overview

4

Timeline

Establishment (1954~1970)

� 1954 Establishment of Dongkuk Steel Mill

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

Rebirth (2001~ )

� 2003 Sales surpass W2t

� 2004 Sales surpass W3t; market cap surpasses W1t

Development (1971~1980)

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

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

Growth phase I (1981~1990)

� 1988 Listed on Korea Stock Exchange (IPO)

Growth phase II (1991~2000)

� 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 line and 1.5 million tonne #2 plate mill line (Pohang)

5

Offices and steel works

Incheon plant

Seoul (Headquarters)

Pohang plant

Busan plant

South Korea

US branch

Japanbranch

Shanghaioffice

Capacity

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(‘000 tonnes)

6

Process

Slab Reheating Rolling Cutting Marking Plate

Scrap EAF1) LF2) Continuous Casting Semi-finished product

Rebar

Section

Rolling Reheating

H-beam, angle, channel, flat bar, and profile products Note: 1) EAF = Electric Arc Furnace

2) LF = Ladle Refining Furnace

7

Local market share (2004)

Note: Market share of sections based on H-beam sales

� Heavy plate

�Rebar

�Section

POSCO

56%

Dongkuk

Steel Mill

44%

Dongkuk Steel Mill 20%

INI Steel 40%

Others 22%

Korea Iron

& Steel 18%

INI Steel 70%

Dongkuk Steel Mill 30%

100--70

18

-

Korea Iron & Steel

100

100

Total

22

-

Others

-5644Heavy plate

-30Section

40-20Rebar

INI SteelPoscoDongkuk Steel Mill M/S (%)

8

ASP trends

2000 2001 2002 2003 2004 2005

(‘000won/tonne)

ASP trends

200

300

400

500

600

700

800

1 Q 2 Q 3 Q 4Q 1 Q 2 Q 3 Q 4Q 1 Q 2 Q 3 Q 4Q 1 Q 2 Q 3 Q 4Q 1 Q 2 Q 3 Q 4Q 1Q

Plate

Section

Rebar

495 (Jan 2004) → 560 (Mar) → 630 (Apr) → 710 (May) → 750 (Jun)PlatePlate

451 (Jan 2004) → 496 (Feb) → 537 (Mar) → 533 (Sep) → 508 (Jun 2005)Rebar (based on D10)Rebar (based on D10)

503 (Jan 2004) → 553 (Feb) → 613 (Mar) → 593 (Jun)Section (HSection (H--beam)beam)

(‘000 won/tonne)Basic price trend (2004)

9

5 years’ results

Note: * Dividend yield=dividend/yearly average share price

Dividend

Financial ratios

I/S (Wm)

Production

20042003200220012000

6.79.67.612.88.6Dividend yield* (%)

750500400300250DPS(won)

154.2163.3141.8147.2181.1Debt/equity ratio (%)

15.111.19.28.73.9OP margin (%)

456,235 131,879 86,494 14,874 -149,680 Net Profit

645,471 182,893 126,162 24,343 -175,462 Recurring Profit

492,950 258,268 180,162 154,837 60,752 Operating Profit

3,267,423 2,323,457 1,957,894 1,785,169 1,544,281 Sales

5,555 5,640 5,506 5,190 4,704 Finished steel (‘000 tonnes)

2,971 2,850 2,757 2,620 2,457 Steel making (‘000 tonnes)

1,5441,785

1,958

2,323

3,267

493258180155

61

2000 2001 2002 2003 2004

Sales

Operating profit

(Wb)CAGR 11.3%

10

5 years’ stock price movement

Historical low: W1,360 (Apr 2, 2001)

Historical high: W25,500 (Feb 4, 2005)

Share buyback Share buybackShare buyback & cancellation

Share buyback & cancellation

(Won)

2001 2002 2003 2004 2005

PER : 2.5

PBR : 0.7

Included in

MSCI Korea

(Jun 2005)

5 years’ stock price movement

11

Share buyback history

• Share buyback Mar~May (4 million shares @ W5,993/shr)

• Share buyback Oct~Nov (4 million shares @ W5,008/shr)20022002

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

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

12

Shareholder structure (as of Jun 2)

Note 1): Capital Research & Management Co (CRMC) reported holding of 5.08% on Mar 25

Related parties 23.6% Foreign investors1) 22.1%

Other 29.4%Treasury stock 24.9%

Shareholder structure (as of Jun 2)

76,881,000 (before share cancellations)Original no of sharesOriginal no of shares

5,056,710 (2003~2004)CancellationsCancellations

71,824,290Current shares outstandingCurrent shares outstanding

13

Affiliates (domestic, 2004)

75.0%0.60.81.3DK Shipping

54.0%-0.2-0.316.0Busan port pier #4 operator

80.8%5.15.5116.0Dongkuk Transportation

56.0%6.07.0114.3Kukje Transportation

100.0%3.58.1184.2Kukje Machinery

100.0%-3.5-7.145.0Union Coating

74.9%78.783.61,114.0Union Steel (listed)

ShareholdingsNet IncomeOperating IncomeSales(Wb)

Note: Company types

1=CR products, 2= Machinery, 3= Logistics

1

2

3

14

Merits

Steel portfolioSteel portfolio

• Optimal product mix

- Solid sales mix (2004)

: Steel plate 48%, rebar 31%, section 21%

: Sales well balanced between shipbuilding & construction industries

Relationship with labor unionRelationship with labor union

• Advanced relationship with labor union

- Industry’s first ever permanent strike renunciation in1994

- Management entrusted with salary decision-making (11 yrs)

- Cooperation improving profitability/productivity

Efforts for the futureEfforts for the future

• Vision

- Change & growth

- Core values: People, innovation, passion

- Core strategy: To strengthen competitiveness in steel business, improve business portfolios & organization

II 1Q 2005 results1Q 2005 results

16

Production and sales volume

77.1 37 85 48 Heavy plate

-76.0 -19 6 25 Rebar

-4.6 -62 1,292 1,354 Finished steel

Sales

Production

(‘000 tonnes)

Total

Sub total

Section

Export

Sub total

Section

Rebar

Heavy plate

Domestic1)

Steel making

ChgChg1Q051Q04

(%)

-6.1-841,2901,374

21.0 26 150 124

15.7 8 59 51

-8.8 -110 1,140 1,250

-16.8 -44 218 262

-15.5 -69 375 444

0.6 3 547 544

-10.1 -75 667 742

Note: 1): Including indirect exports

� Steel production declined due to transformer breakdown in Pohang (Feb 2005)

� Rebar/section shipment declined due to sluggish local construction demand and inflow of Chinese products

� 1Q04 saw speculative demand on anticipated steep hike in steel prices

17

Sales by product

� Overall sales increased around W160b due to ASP hike

� Sales of long products decreased due to soft building activity

22.0 5.4 30.0 24.6 Section

44.1 28.3 92.4 64.1 Sub total

Export

Sales1)

(Wb)

Rebar

Heavy plate

Sub total

Section

Rebar

Heavy plate

ChgChg1Q051Q04

(%)

-75.0 -8.4 2.8 11.2

110.6 31.3 59.6 28.3

21.3 130.8 745.9 615.1

-8.8 -11.9 123.5 135.4

-4.4 -9.1 196.3 205.4

55.3 151.8 426.1 274.3

23.4 159.1 838.3 679.2

Note: 1) Excluding sales of bought-in goods and by-products2) Including indirect exports

Domestic2)

18

Income statement

� Operating margin increased on stronger won (W1,024.3/US$ at end-1Q05 vs W1,153.6/US$ at end-1Q04),

despite higher raw-material costs

Chg1Q051Q04

(%)(Wb)(%)(Wb)(%)(Wb)

34.3 32.2 14.9126.1 13.793.9 Net Profit

28.9 38.6 20.4172.2 19.6133.6 Recurring Profit

-21.9 -4.2 1.815.0 2.819.2 (interest expense)

-46.1 -15.3 2.117.9 4.933.2 Non-Operating Expense

23.1 1.2 0.86.4 0.85.2 (interest income)

-7.5 -5.1 7.462.7 9.967.8 Non-Operating Income

28.7 28.4 15.1127.4 14.599.0 Operating Profit

-4.3 -1.3 3.428.9 4.430.2 SG&A

21.0 27.1 18.5156.3 18.9129.2 Gross Profit

24.3 134.4 81.5688.2 81.1553.8 COGS

23.6 161.5 100.0844.5 100.0683.0 Sales

19

Profitability trend

Sales and operating profit Margin/ratio trends

(Wb)

167%

149%154%

161%

167%

20%19%

14%

19%

23%

16%15%

20%

15%

10%

100%

110%

120%

130%

140%

150%

160%

170%

180%

1Q04 2Q 3Q 4Q 1Q05

0%

5%

10%

15%

20%

25%

30%

35%

40%

Debt/equity ratio EBITDA margin

OP margin

683.0

824.6

903.9844.5855.9

93.8139.3160.8

99.0 127.4

0

200

400

600

800

1,000

1Q04 2Q 3Q 4Q 1Q05

Sales Operating profit

20

Balance sheet

� Higher current ratio in 1Q signals improved financial stability

� Fixed liability rose due to W200b in corporate bonds (redeemed W100b in Jan 05, planning to redeem

W100b in Oct 05)

Chg (%)Chg1Q052004(Wb)

5.8 68.8 1,249.7 1,180.9 etc.

0.0 0.0 421.2 421.2 Paid-in capital

4.3 68.8 1,670.9 1,602.1 Equity

33.3 129.9 520.1 390.2 Fixed

-5.6 -115.9 1,964.7 2,080.6 Current

0.6 14.0 2,484.8 2,470.8 Liabilites

1.0 21.3 2,137.8 2,116.5 Fixed

3.1 61.5 2,017.9 1,956.4 Current

2.0 82.8 4,155.7 4,072.9 Assets

21

Leverage

Debt

Chg (%)Chg1Q052004(Wb)

Net debt

Cash & equivalents

Corporate bonds

Long-term

(Usance*)

Short-term

Total

6.962.1 962.3 900.2

4.037.7 971.1 933.4

18.093.0 610.0 517.0

-9.5-0.4 3.8 4.2

-3.7-48.2 (1,240.9 )(1,289.1)

0.57.2 1,319.6 1,312.4

5.499.8 1,933.4 1,833.6

Chg (%)Chg1Q052004

Exchange rate (US$/won)

* Usance (US$m)

-19.51024.31043.8

-1.9-24 1,211 1,235

III 1Q milestones1Q milestones

23

1Q milestones

General shareholders meeting (Mar 11)General shareholders meeting (Mar 11)

• Decided to pay DPS of W750 (9% dividend payout)

• Elected an external financial expert to BOD to improve company transparency (External/internal ratio for BOD members now 6:5 )

Strengthen group integrationStrengthen group integration

• Link/integrate group affiliates to create synergies

• Improve management efficiency by rotating employees among affiliates

Group business evaluation projectGroup business evaluation project

• Select strategic subject through group business evaluation

• Derive strategic KPI with BSC method based on strategic subject

• Develop managing and evaluating tool for strategic KPI by individual officer (director’s MBO)

Form organization to promote innovationForm organization to promote innovation

• To attain company’s overall goal and improve operations

• Build and stabilize IT solutions

Management

24

1Q milestones

Formed task force to establish central R&D center (Mar)Formed task force to establish central R&D center (Mar)

• Center to strengthen group R&D capability

• Task force to create preferable environment

TMR (Thermo Mechanical Rolling) technologyTMR (Thermo Mechanical Rolling) technology

• Fourth trial test in March; planning to acquire certification

• Production to commence from Jul 2005

Production

25

1Q milestones

Stable procurement of slabStable procurement of slab

• Began procuring slab from Corus (Jan, 4.27m tonnes for 10 yrs)

• MOU with Shougang group (China) (Mar, 0.25m tonnes a year)

• Long-term relationships with JFE, CST, BSL and Shagang

• MOU with CVRD to build slab mill in Brazil (May)

Raw material

Finance

Corporate bond issuance (Jan)Corporate bond issuance (Jan)

• Amount: W200b (W100b in 3-year bonds, W100b in 5-year)

• Coupon: 4.12% for 3-year bonds, 4.83% for 5-year

• Impact: Financing cost reduced by rating rise (BBB+ → A-)

IV Demand forecast by productDemand forecast by product

27

Market overview

• Strong demand due to increased

shipbuilding activity Heavy PlateHeavy Plate

• Tight supply expected in premium

market due to POSCO’s facility

rationalization. Low-end market should

edged downward on import overflow

1Q05 2Q05~

• Local demand sluggishRebarRebar

• Demand pickup expected thanks to

investment in public works.

• Decline in demand due to delayed

construction work in commercial/

industrial sector

SectionSection

• Recovery in fixed asset investment,

SOC projects, and economy should

lead to demand pickup.

28

Demand forecast

Source: Korea Iron & Steel Association (Apr 2005)

Section

Rebar

Heavy plate

Chg (%)Chg200520042003(‘000 tonnes)

-0.4 -17 4,730 4,747 4,538 Production

-2.5 -97 3,860 3,957 4,171 Apparent consumption

-4.1 -441 10,295 10,736 11,405 Production

-5.2 -592 10,795 11,387 12,374 Apparent consumption

5.7 320 5,890 5,570 5,198 Production

5.5 414 8,005 7,591 5,850 Apparent consumption

V 2005 forecasts2005 forecasts

30

Production & sales

Note: Excluding sales of bought-in goods and by-products

� Steel production declined due to transformer breakdown in February

� Production of finished steel should be maintained, with sales up 10%

※※※※ Forecasts are for internal use which is subject to change and are not intended to be an offer to buy

or sell the securities mentioned herein.

Sales

Production

Sales (Wb)

Section

Rebar

Heavy plate

Total

Finished steel

Steel making

(‘000 tonnes) Chg (%)Chg20052004

10.1328.6 3,578.0 3,249.4

-1.3-16 1,180 1,196

-5.4-107 1,890 1,997

6.8157 2,480 2,323

0.634 5,550 5,516

-0.1-5 5,550 5,555

-2.4-71 2,900 2,971

31

Jun 9 announcement

Takeover of You Takeover of You EalEal ElectronicsElectronics

• To buy 28.7% stake (W88b) in Youeal Electronics

• Youeal electronics to be managed independently by experienced staff

• Planning to profile as specialized display & telecommunication equipment maker

• Targeting W2t in sales, W300b in net profit in IT business by 2010

� IT industry chosen as Dongkuk Steel Mill’s future growth engine

Description ofDescription of YouealYoueal ElectronicsElectronics

• Established : 1982 (Registered in KOSDAQ as of 2001)

• No of employees : 633

• Paid-in-capital : W5.69b (Shares outstanding: 11,372,200 common shrs with W500 par value)

• Market cap :W 286.6b (Share price at the end of May: W25,200)

• Main products : Handset keypads, High-density flexible PCBs for FPD

• 2004 results : Sales W216.6b, Operating profit W38.7b (OP margin 17.9%), Debt/equity ratio 28.2%