POSCO announced that the company returned to the “one trillion won in operating profit” club. POSCO announced that the steelmaker posted 15.036 trillion won (US$13.5 billion) in sales, 1.125 trillion won (US$1.01 billion) in operating profit and 906.6 billion won (US$815.9 million) in net profit in the third quarter.
POSCO expanded its sales 0.6%, operating profit 15% and net profit 71% thanks to improved earnings in the steel industry at home and abroad and the even strong performances of non-steel subsidiaries such as those in the energy and ICT sectors.
On a non-consolidated basis, POSCO’s sales grew 1.7 percent to 7.255 trillion (US$6.52 billion) from the previous quarter while its operating profit swelled 23.4 percent to 721.8 billion won (US$649 million). Its net profit gained 43.3 percent to 729.9 billion won (US$656 million) from the previous quarter.
According to the World Steel Association (WSA), POSCO ranked fourth in the world last year in terms of crude steel production by recording an output of 41.97 million tons. POSCO’s financial soundness has been improving steadily, too. Its debt-to-equity ratio fell 1.5 percent from the previous quarter to 68.1 percent, the lowest since 2010 on a consolidated basis. The ratio hit 16.3 percent, maintaining the lowest level following the previous quarter on a non-consolidated basis.
Earnings improvements at major overseas steel subsidiaries contributed to the increase in POSCO’s operating profit. The operating profit of its Chinese stainless steel production subsidiary Zhangjiagang Pohang Stainless Steel rose 572.5 percent to 53.8 billion won (US$48.4 million) from the previous quarter and PT.Krakatau POSCO, POSCO's integrated steel mill in Indonesia returned to profitability with operating profit of 8.8 billion won (US$7.9 million). The operating deficit of POSCO SS-VINA, POSCO’s subsidiary in Vietnam also shrank a great deal.
There is a bright outlook for POSCO as well. In 2011, POSCO had ranked fourth but remained at the fifth place for the following three years. The global total crude steel production reached 1.621 billion tons last year, down 2.9% from a year ago. China’s volume amounted to 803.8 million tons, slightly less than the 822.8 million tons recorded in the preceding year. China was followed by Japan (105.2 million tons) and India (89.4 million tons).
Steel demand is expected to steadily grow due to a restructuring in the Chinese steel industry and expectations for the robust growth of demand in emerging and developing countries. Moreover, POSCO will continue to make efforts to internally generate profits by securing financial soundness, reducing costs, and increasing sales of high value-added products.
(Source: Business Korea; edited)