On October 26, POSCO held an IR session and announced a revenue of KRW 12.748 trillion, as well as an operating profit of KRW 1.034 trillion in the third quarter. Its net income amounted to KRW 475.5 billion.

As the number of its subsidiaries was reduced due to group restructuring, revenue on a consolidated basis declined by 0.9% QoQ. However, thanks to the slight improvement in the performance of the energy and ICT divisions due to the vastly improved performance of the steelmaking division, operating profit and net income increased by 52.4% and 115.6% QoQ respectively.

In particular, due to the increased sale of high value-added products and a reduction in costs, the operating profit of overseas steelmaking subsidiaries increased by 1148% QoQ to KRW 132.3 billion. The integrated steel mill in Indonesia also recorded an operating profit of KRW 38.5 billion. In addition, major overseas steelmaking subsidiaries, including the Mexico CGL, the cold rolling mill in Vietnam and the cold rolling mill and CGL in Maharashtra, India, saw their operating profits greatly increase.

The separate revenue and operating profit of POSCO increased by 1.6% and 19.6% QoQ respectively to KRW 6.106 trillion and KRW 852.4 billion. Its net income amounted to KRW 579 billion, up 86.5% QoQ.

The separate operating profit margin went up by 2.1% QoQ to 14% thanks to the increased sales of WP (World Premium) products and solutions, the higher price of steel and cost-saving efforts. It is the highest figure in 20 quarters since the third quarter of 2011.

The sales of WP products increased by 199,000 tons QoQ to 4,038,000 tons, a record high. As a result, WP products now account for 48.1% of the total sales of POSCO.

Its financial strength drastically improved as well. The consolidated debt-to-equity ratio was lowered by 5.5% QoQ to 70.4%, the lowest level since the introduction of the Consolidated Accounting Standards, and the separate debt-to-equity ratio declined by 2.3% QoQ to 16.9%, the lowest level since its founding. The debt on a consolidated basis decreased from the previous quarter to KRW 2.264 trillion, and on a separate basis, as it has more cash than loans, the net debt became negative (△KRW 829.5 billion).

Meanwhile, POSCO decided to merge POSCO TMC and SPFC into POSCO P&S in the third quarter, and slimmed down the structure of its steel distribution business. It also merged its processing centers in China and Japan to innovate the structure of its overseas steel business. All in all, POSCO completed nine cases of affiliate restructuring and eight cases of asset restructuring. POSCO is planning to finalize 24 cases of affiliate and asset restructuring in the fourth quarter of 2016, and 27 cases next year.

POSCO to Post 678.5 billion Won in Operating Profit on a Consolidated Basis During the Second Quarter

POSCO Announces First Quarter Earnings During IR Conference Call

Be sure you never miss any of the exciting steel stories from The Steel Wire by subscribing to our blog.

On April 21, POSCO held an Investor Relations (IR) conference call to announce improved operating performance of its first quarter.

Although POSCO recorded KRW 12.46 trillion in revenue in the first quarter on a consolidated basis, which is a slight decrease from the previous quarter, it recorded KRW 659.8 billion in operating profit, KRW 319.3 billion up from the previous quarter, and KRW 352.5 billion in net income during the term,  KRW 243 billion up from the previous quarter. The company also accounted for 5.3% in operating profit margin, which is 2.9%p up from the previous quarter.

Operating profit increased due to improvement in sales performance in steel and trading 

These positive results can be attributed to increased performance in the steel and trading divisions, being operated by POSCO Daewoo and POSCO-China, even though the construction division showed a decrease in sales and profits. Overseas steel corporations exhibited remarkable improvement in sales performance, as Zhangjiagang Pohang Stainless Steel (ZPSS) and POSCO-Mexico realized profits, and the operating deficits of PT. KRAKATAU POSCO and POSCO SS-VINA are beginning to be reduced.

KRW 582.1 billion in operating profit, 10.1% in operating profit margin (in paraent basis) 

On a parent basis, POSCO recorded KRW 5.767 trillion in revenue, KRW 582.1 billion in operating profit and KRW 445.9 billion in net income during the term. Although revenue has slightly decreased, the company recorded KRW 210.9 billion in operating profit and KRW 184.1 billion in net income during the term, which is an increase from the previous quarter. This is driven by the sales increase of World Premium (WP) products, POSCO’s proprietary high-value products, along with the improvement of market conditions due to the price increase of carbon steel products and restructuring of Chinese steel companies.

POSCO recorded 3.682 million tons in sales volume of WP products, which amounts to an increase of 255,000 tons from the previous quarter. Among total product sales, the sales of WP products accounted for 44.5%, which is an increase of 4.8%p from the previous quarter.

Also POSCO recorded 10.1% in operating profit margin which is an increase of 3.9%p from the previous quarter.

POSCO forecasts to improve the financial structure of KRW 4 trillion within this year by accelerating the restructuring of subsidiary companies

POSCO realized continuous improvement of its financial structure. On a consolidated basis, it recorded 77% in debt-to-equity ratio, which is a decrease of 1.4%p from the previous quarter, while registering 19.2% on a parent basis, which is 0.1%p down from the previous quarter.

In particular, on a parent basis, the company recorded -356.3 billion in net debt in the first quarter from 341.3 billion in the  previous quarter as total cash and cash equivalents have increased more than debt. This is the result of improving the company’s overall financial structure that it has strived for over the last two years.

POSCO completed 6 subsidiary restructuring cases in the first quarter, which have been carried out since the announcement of the management reform plan in July of last year. The company sold Genesis, a subsidiary in the power generation sector, and finalized liquidation of POSCO-RUS, while completing the merger of POSCO Green Gas Technology. It is expected that the improvement effect will reach to approximately KRW 4 trillion through the restructuring of subsidiary companies.

Meanwhile, POSCO announced its sales goal of KRW 58.7 trillion on a consolidated basis, and 37.2 million tons for the production of crude steel and 35.3 million tons for product sales. The company also estimated that its investment costs amounted to KRW 2.8 trillion, which is KRW 300 billion up from last year, and net debt was KRW 14.6 trillion, which is KRW 1.9 trillion down from last year.

Be sure you never miss any of the exciting steel stories from The Steel Wire by subscribing to our blog.

On February 9^th, POSCO CEO Ohjoon Kwon hosted an Investor Relations (IR) meeting in New York, United States. This meeting was the very first international IR conference held overseas ever since his inauguration. “By following POSCO’s 3-year intermediate management plan, we will ensure internal stability,” CEO Kwon said at the POSCO’s international IR conference, held in Four Seasons Hotel in New York. Also, he added, “We will do our best to return all shareholders’ trust and support”.

Upon the completion of the IR meeting, CEO Kwon rang the Closing Bell of the New York Stock Exchange (NYSE) to notify that markets have been closed. The NYSE offered an opportunity for CEO Kwon to ring the NYSE Closing Bell to celebrate the 20^th anniversary of POSCO’s listing.

In October 14^th 1994, POSCO became the first-ever Korean company to list on the NYSE and the second steel company to be listed after UK’s British Steel. As the company successfully fulfilled NYSE’s strict listing requirements such as shareholder distribution, accounting, and management capability at the time, POSCO has established a reputation as a major global company. Upon POSCO’s NYSE listing, other Korean companies started to deviate from domestic stock market and reached out to secure funds from international market; Domestic companies such as Korea Electric Power Corporation, LG, SK and more followed to be listed on the NYSE.

Continuing from its NYSE listing, POSCO was listed on the London Stock Exchange (LSE) on October 27^th, 1995 and on the Tokyo Stock Exchange on November 22^nd, 2005. The company now stands as the one and only Korean company that has been listed on the global top 3 stock markets.

Meanwhile, POSCO announced its 2014 consolidated revenue and operating profit as KRW 65.984 trillion and 3.2135 trillion respectively. Moreover, POSCO has proposed KRW 67.4 trillion in consolidated revenue and 29.3 trillion in independent revenue as performance objectives in 2015.

POSCO (NYSE: , PKX) held IR conference call on October 23^rd, to announce its 3Q performance results.

On a consolidated basis, the company recorded 16,270 billion KRW (About 14.4 billion USD) in revenue and 879 billion KRW in operating profit. Operating profit margin went up to 5.4%, 0.4%pt increase from 2Q, due to stabilization of global steel business and increased profit in the energy sector.

Especially, Indonesian integrated mi started operation from January 2014, showed utilization rate of 82% and 24% increase in sales volume from the 2Q, which resulted in 3Q operating profit. Also, POSCO India’s electrical steel mill turned the profit through expanding its sales base. With support from the stabilized performance of overseas steel mills, steel sector profitability recorded 5.3%.

Meanwhile, Daewoo International’s Myanmar gas field showed 20% of an increase in operating profit from 2Q, as production expanded as scheduled. Along with the increase in production volume, the operating profit of POSCO Energy has also increased by 138% from 2Q.

POSCO stand-alone revenue reached 7,290 billion KRW (7.2901 trillion USD) and operating profit recorded 635 billion KRW. Due to increased export to overseas production centers, POSCO’s product sales and operating profit have enhanced. As a result, POSCO has recorded operating profit of 8.7%, which is 1.1%pt increase from 2Q.

POSCO is also expanding its automotive steel products sale, by using global production sites and sales network. As POSCO continues to expand sales to global automakers towards target regions, including the U.S. and China, through 5 automotive steel product mills, and 47 coil centers, POSCO expects to reach 8.2 million ton in total sales amount of automotive steel in 2014.

POSCO’s client-oriented solution marketing activities have contributed to the increase in a high-value steel product sales. Adding to the development of high-strength PosM Steel, super austenitic stainless steel products and magnesium panel, the new automotive lightweight material, the sales of the solution marketing products have increased up to 407 thousand tons, which is 59% increase from 2Q.

Although the steel demand in 4Q is expected to increase slightly, due to seasonality and the slow market conditions of the automobile industry, POSCO plans to steadily expand the client-oriented solution marketing activities.

Moreover, POSCO has continued to reduce carbon emissions through activities, such as building off-gas power plants. Furthermore, POSCO will continue its social contribution to reducing greenhouse gases by development and sales of high strength steel for a lighter-weight automobile.