POSCO Q2 Profit More than Doubles
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POSCO Q2 Profit More than Doubles
Superb performance results owed to non-steel sector such as construction, energy, and trading to cover slowdown in steel sector operation

25(Fri), Aug, 2017

A view of POSCO Center in Seoul. (Photo: POSCO)

POSCO 2nd Qtr. profit more than doubles profit rises to 530.1 billion won from 220.5 billion won, thanks to excellent results in construction, energy and trading affiliates to cover slowdown in steel sector,POSCO said July 20 its second-quarter net profit more than doubled, helped by earnings from its non-steel sector businesses. Net profit for the three months that ended on June 30 soared to 530.1 billion won (US$471 million) from 220.5 billion won a year earlier, the steelmaker said in a statement.

"Solid results in construction, energy and trading affiliates helped buoy the steelmaker's bottom line in the second quarter," a company spokeswoman said over the phone.

Operating profit jumped 44 percent to 979.1 billion won in the second quarter from 678.5 billion won a year earlier. Sales rose 16 percent to 14.9 trillion won from 12.8 trillion won during the same period. Looking ahead, the world's fourth-biggest steelmaker by output expects to post 59.3 trillion won in sales for the whole of this year, up 12 percent from 53.1 trillion won achieved in the previous year, the statement said.

"In the second half, we will continue to focus on improving our financial status, cutting costs and increasing sales of value-added products to make profits," it said.

Under a three-year restructuring program that ends at the end of 2017, POSCO has sold non-core assets and reorganized its workforce and businesses to remain competitive amid a prolonged economic slowdown since the 2009 financial crisis.

POSCO forecasts steel demand will improve further for the remaining year as China continues restructuring in the steel industry and the economies of advanced countries are on a recovery path.

In the January-June period, net profit jumped nearly three times to 1.507 trillion won from 558.9 billion won a year ago.

On July 20, POSCO announced these figures during an investor conference call for Q217. POSCO executives explained that performance declined slightly due to the deterioration of earnings in the steel, construction and energy sectors, but its consolidated revenue and operating profit rose by 16.2 percent and 44.3 percent YoY, respectively.

Another factor that slowed growth was renovations for POSCO’s Pohang Blast Furnace #3 and the hot-rolled and thick plate plants. As a result, crude steel production and sales decreased in the second quarter. Also, due to sales of high-priced inventory, which was produced in the first quarter when raw materials were the most expensive, the consolidated revenue and operating profit decreased by 0.9% and 28.3%, respectively, compared to the first quarter.

POSCO’s separate revenue increased by 18.7 percent YoY to 7.1343 trillion won, and its operating profit decreased by 17.9 percent YoY to 585 billion won due to the increased costs of raw materials.

On March 21, POSCO DAEWOO (President: Kim Young-sang) celebrated the launch of its new name and new corporate identity at Songdo ConvensiA Convention Center in Incheon, along with more than 1,000 employees. Prior to the change, the company had been known as Daewoo International, since being incorporated by POSCO Group in 2010.

Presidents from POSCO Group affiliates, including POSCO E&C, POSCO Energy and POSCO ICT, attended the ceremonies, along with POSCO CEO Ohjoon Kwon and Incheon Mayor Jeongbok Yoo. 

The national bobsleigh & skeleton team delivered congratulatory messages on video for POSCO DAEWOO’s historic first step. The event kicked off with the unveiling of the new corporate identity, followed by the presentation of the company flag, badges and employee cards.

“POSCO DAEWOO’s new start is significant in that the unique advantages that POSCO and POSCO DAEWOO have obtained over the last half-century will be combined and embedded into the employees’ DNA,” said CEO Kwon in a congratulatory address. “I look forward to seeing POSCO DAEWOO take the initiative in making POSCO Group proud by enhancing the synergy of the company’s global businesses as a key affiliate of the group.”

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