POSCO’s Q217 recorded a consolidated revenue of KRW 14.944 trillion, operating profit of KRW 979.1 billion and a net profit of KRW 530.1 billion.
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% and 44.3% 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% YoY to KRW 7.1343 trillion, and its operating profit decreased by 17.9% YoY to KRW 585 billion due to the increased costs of raw materials.
Although still operating in surplus, the E&C division and the trading and energy divisions saw a drop in their operating profit from the first quarter.
POSCO’s consolidated debt to equity ratio was 69.6%, the lowest since 2010, and its standalone debt ratio was 16.3%, the lowest ever. In contrast, the share of sales of World Premium Products, high value-added products, went up by 10.7% YoY to 56%, the highest ever. POSCO killed two birds with one stone, as it reinforced financial soundness as well as increased profitability.
Due to the restructuring of the Chinese steel industry and economic recovery in advanced countries, POSCO forecasts steel products will continue to be in high demand. POSCO is planning to make continued efforts to generate revenue by securing financial soundness, reducing costs and increasing the sales of World Premium Products.
Accordingly, POSCO revised its consolidated and stand-alone revenues that were set at the beginning of the year, increasing them by KRW 4.5 trillion and KRW 2.8 trillion, respectively. The new consolidated revenue is KRW 59.3 trillion and the new separate revenue is KRW 28.4 trillion.