POSCO saw improvement in its performance with 12.8574 trillion won in sales and 678.5 billion won in operating profit on a consolidated basis.

Although the construction and energy sectors showed a slight decrease in sales and operating profit, steel, ICT and other materials exhibited overall improvement, leading to an increase in sales and profit in those sectors by 3.2% and 2.8%, respectively. The operating profit margin amounted to 5.3%, remaining at the same level as the previous quarter.

In particular, the operating profit in the steel sector, which includes the combined profit of overseas steel subsidiaries, increased 33.1% from the previous quarter to make a profit during the second quarter. The overseas steel subsidiaries, which had an overall deficit of 399.1 billion won last year, reduced the deficit to 42.3 billion won in the first quarter and raised 10.6 billion in the second quarter, resulting in an increase of 52.9 billion won from the previous quarter.

Zhangjiagang Pohang Stainless Steel (ZPSS), the manufacturer of STS in China, has realized profit for the second straight quarter thanks to an increase in the prices of raw materials, including nickel. PT. Krakatau POSCO in Indonesia and POSCO SS-VINA in Vietnam have largely reduced their deficit as well.

Recorded profit margin is currently at 11.9%, the highest in four years, thanks to the increased sales ratio of high quality steel (on a parent basis)

In terms of parents, POSCO posted 6.96 trillion won in sales and 712.7 billion won in operating profit, up by 4.2% and 22.4% respectively from the previous quarter. It posted 310.5 billion won in net income during the term, down by 30.4%, due to asset impairment caused by the decrease in the value of their stock holdings and losses on valuation of foreign debt caused by exchange fluctuations.

The operating profit margin for parents amounted to 11.9%, up by 1.8% from the previous quarter, which is the highest since the second quarter of 2012. This was driven by the sales and price increase of World Premium (WP) products. It can also be considered a result of the enhanced competitiveness in basic steelmaking, as the company has actively implemented a marketing solution designed to satisfy the needs of customers from the manufacturing stage to the selling stage.

The sales volume of WP products reached 3.839 million tons, up by 157K tons from the previous quarter. WP products accounted for 45.2% of total product sales, an increase of 0.7% from the previous quarter.

Completed 81 cases of restructuring of assets and subsidiaries since 2014

The company’s overall financial health is steadily improving as well. It recorded 75.9% in debt-to-equity ratio on a consolidated basis, the lowest since 2010, and 19.2% on a parent basis, the lowest since its founding.

Relevant innovation within the business structure, which has been underway since 2014, is being carried out smoothly. The company has completed 45 subsidiary restructuring cases from 2014 up to the first half of this year, which includes the cases completed during the second quarter. An example of such a case is the merger between POSCO AST and POSCO P&S. Eighty-one cases, which include 36 asset restructuring cases, have been completed so far out of a total of 149 cases, with the overall restructuring target to be achieved by 2017. POSCO will restructure 28 domestic and overseas subsidiaries and 13 assets during the second half of this year.

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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.

POSCO Holds an IR Conference Call To Announce The First Quarter Earnings, Reports 15,440 Billion In Sales Revenue On A Consolidated Basis

POSCO (NYSE:PKX) held a conference call on 24 April to announce the results of their first quarter for fiscal year 2014. On a consolidated basis, the company recorded KRW 15,440 billion in sales revenue and KRW 731.3 billion in operating profit.

The company saw a drop in sales and operating profits due to global economic recession. However, its operating profit margin grew by 4.7 percent, as a result of improved profitability in non-steel businesses. Net profits decreased to KWR 55.6 billion, due to the weakened won and tax audit expenditure.

On a Non-consolidated Basis, POSCO Records KRW 7,363.8 Billion in Sales Revenue and KRW 517.7 Billion in Operating Profit

On a non-consolidated basis, the company recorded a sales revenue of KRW 7,363.8 billion and operating profit of KRW 517.7 billion.

The volume of crude steel production and sales for Q1 dropped to 9.3 million tons and 8.4 million tons respectively, effected by shorter calendar days, as well as the maintenance of main facilities.

The seasonality also had an impact to POSCO’s quarter-to-quarter sales in the major steel-consuming industries such as automobile, and shipbuilding & ocean plant, which decreased to 2.0 million tons and 0.7 million tons respectively.

Despite the drop in Chinese steel prices, POSCO was able to record an operating profit margin of 7.0 percent, reporting a quarter-to-quarter increase of KRW 30 billion on a non-consolidated basis, by maintaining its price while cutting down on raw material costs.

POSCO further improved its profitability by converging marketing and technology to reinforce customer-oriented sales activities. The company increased the sales portion of its seven ‘high value-added’ and ‘strategic’ core product areas including automobile, shipbuilding, and energy steel pipes from 48 percent in 2013 to 51 percent. The company also strengthened its solutions for the demand industry by building high manganese steel LNG storage tanks, expanding automobile steel plate supplies for super high strength complicated structures on the 1Gpa grade, and developing 16 new steel grades that respond to customer needs.

Continued Efforts to Improve Financial Soundness

Efforts to improve its financial soundness were also continued.

In March, POSCO reimbursed high-yield bonds valued at USD 700 million to cut down the debt, reducing the cost of interest by using its own funds and low-yield Japanese Yen bonds issued in December 2013. Furthermore, the company made various efforts to improve financial conditions, such as reducing turnover period of the assets. As a result, its cash and cashable assets increased by 46 percent compared to the end of 2013, reaching up to KRW 2,033 billion.

POSCO is expected to further improve its cash flow as it cuts down on investment this year. The company is readjusting its investment shares in project-financing for POSCO E&C, and the funds implementation plan for its joint venture with Dongkuk Steel and Vale, Brazil CSP Steel Plant Complex, was also delayed.

Improved Performances of Key Affiliates In Trade and Construction Businesses

Performance from its major affiliate companies including trades and constructions also improved this quarter. POSCO E&C reported 6.6 percent in operating profit margin, recording a 2.2 percentage point  growth quarter-to-quarter, and Daewoo International also reported 1.3 percent in operating profit margin, recording an increase of 0.4 percentage point.

POSCO anticipates that the global demand for steel in second quarter to recover slightly, as steel prices rebound after the Chinese New Year due to inventory adjustment and restored demand. The global demand will turn to a stable 3 percent growth level in 2014 ~ 2015, as the demand from the U.S. and Europe recovers to 3 ~ 4 percent range.

POSCO plans to go all out in improving management performance, by reinforcing sales activities that incorporates technology into marketing. The company will also continue its efforts to increase the sales portion of ‘high value’ products by providing customized solutions that touches all aspects of the business, from product planning to sales, and services, while at the same time maximizing its financial soundness.

2014 Q1 Business Results

In the third quarter, both sales and operating profit were reduced compared with the last quarter due to a depression in demand, a selling price fall and rising cost of feed stocks during the off-season worldwide, along with cut-production policies followed by an unprecedented power shortage, but POSCO managed to minimize the decrement through product differentiation and cost-reduction measures.

The market share of the ‘world-best’ products that POSCO produced with its world’s top three technologies and economic feasibility such as high-strength tire code and eco-friendly AHSS (Advanced High-Strength Steel) and the ‘world-first’ products that POSCO developed for the first time in the world has continued to increase, and in the end, reached 22.5% from 15.5% in the third quarter of the last year.

In terms of cost reduction, a total of 494.7 billion won was saved including 223 billion won in the cost of raw materials, 75 billion won in material costs and 121 billion won in expenses.

In addition, POSCO made a significant achievement this quarter in expanding its energy and material markets that were promoted in keeping with the upcoming age of slow growth in the iron and steel industry. Based on the consolidated financial statement, operating profit in the steel market reached 3.5%, whereas operating profit in energy and chemical materials markets marked 7.5% and 4.1%, respectively, and accordingly exceeded operating profit in the steel market.

POSCO predicted that the global demand of steel will recover in the fourth quarter. It is expected that the Chinese steel market will begin to recover as the overstock problem, which was the main reason behind the weakening of steel prices in the Chinese market, is solved, together with an increase in stock and imaginary demand in the course of preparing for the Chinese New Year. Moreover, the global steel demand in 2014 is expected to reach about 1 billion tons along with a stable increase of 3% in demand as there is an indication of an increment in moderate demand among advanced countries with signs of economic recovery.

In line with the business recovery in the fourth quarter, POSCO plans to concentrate all its efforts to strengthen the high value-oriented in-depth marketing, and therefore improve business performance. The plan is to promote the total-solution marketing activities through which customer-oriented service is provided in the entire process from product designing to sales, in order to increase the market share of the world-first and world-best products, and at the same time, amplify the synergy between its subsidiaries by concentrating on the capabilities of the main business.

Meanwhile, POSCO announced the sales goal of 63 trillion won based on the consolidated financial statement, and of 31 trillion won for POSCO alone this year, and the consolidated investment of 8 trillion won, and alone, 4 trillion won.

On July 25th, POSCO held an investor relations conference call to announce that POSCO achieved a KRW 15.6 trillion in revenue, based on consolidated financial statements for Q2 2013, accompanied with an operating profit of KRW 903 billion and a net profit reaching KRW 241 billion.

KRW 7.74 Trillion Revenue Accomplished Solely by POSCO
Operating Profit Hits KRW 703 Billion Mark

Bolstered by the enhanced performance in steel sector and the increased level of contribution from construction, energy and ICT sectors, POSCO’s operating profit has increased by 25.9 percent from the previous quarter. The revenue and operating profit solely accomplished by POSCO reached KRW 7.74 trillion and KRW 703 billion.

POSCO’s Q2 2013 sales by product also increased from the last quarter, rocketed by selling 3.71 million tons of Top 4 high value-added products, including the products for automobile, energy, shipbuilding and home appliance. The figure improved by 3.5 percent QoQ. It is a meaningful advance made by POSCO because the total number of sales had been slightly decreased due to the restricted number of shaft furnaces at Gwangyang Steelworks. Notably, despite a weak yen, POSCO’s sales actually rose in China and Southeast Asia, the major competition markets, by 14.3 percent and 12.3 percent YoY.

Cumulative cost-saving result was completed at KRW 142.9 billion from raw materials and KRW 45.5 billion from materials. With the boost, POSCO is expecting to generate an annual cost-saving cash flow of about KRW 730 billion. Notably, the cost-savings from manufacturing molten iron is forecasted to stretch at KRW 100 billion as the world’s biggest ‘Furnace 1’ at Gwangyang Steelworks has successfully launched its operation in June.

Global Steel Demands Expected to Rise by 3%
Steel Price in China Can Recover After Q3

For this year, the outlook for the global steel manufacturing market indicates that the demand curve could pick up by 3 percent from last year with the demand growth trend remaining bullish at 6 percent in Southeast Asia and other emerging markets. China, the world’s biggest steel product market, is anticipated to recover its price of steel after the third quarter.

For 2013, POSCO has set its target for the annual consolidated revenue at KRW 64 trillion as well as POSCO’s independent revenue of KRW 32 trillion.