POSCO Chairman and CEO Kwon Oh-joon has pledged to almost double its consolidated operating profit from 2.8 trillion won (US$2.5 billion) last year to 5 trillion won (US$4.47 billion) within the next three years, declaring an aggressive management strategy. To this end, Kwon will make overall group businesses smarter, advance the steel business and expand the non-steel and futuristic materials businesses.
At the CEO Forum for institutional investors held at the NH Investment & Securities headquarters in Yeouido, Seoul, on March 30, Kwon said, “Our consolidated operating profit will jump from 2.8 trillion won (US$2.5 billion) last year to 5 trillion won (US$4.47 billion) at the end of 2019 when the new mid-term strategy is completed and the sales of new growth engine businesses will expand to more than 11.2 trillion won (US$10.01 billion) by 2025.”
In the new growth engine sector, POSCO will aggressively push to mass produce energy storage materials, such as lithium and nickel, based on its own technologies that extract lithium from saltwater and battery waste and that refine nickel using low-grade nickel ores. Other high-potential businesses include developing magnesium sheets that are expected to go in high-end cars in the future by securing wide steel manufacturing technology and producing titanium that are expected to start localizing aircraft materials from 2019.
POSCO will also develop and expand natural gas storage business, overseas independent power project (IPP) and new renewable energy business. The company set 11.2 trillion won (US$10.01 billion) as the revenue target for these new businesses by 2025 and said it would invest 2.5 trillion won (US$2.24 billion) over the next three years.
In addition, POSCO plans to boost its operating profit in the non-steel sector, which show low profitability including trading and infrastructure, from 600 billion won (US$536.67 million) to 1.5 trillion won (US$1.34 billion) a year by restructuring mainly lucrative businesses.
Meanwhile, according to the first quarter tentative performance result announced on the same day, POSCO posted 6.99 trillion won (US$6.25 billion) in the sales and 740 billion won (US$661.9 million) in operating profit, up 21 percent and 27 percent, respectively, compared to the same period a year earlier. On consolidated earnings, the company recorded 14.6 trillion won (US$13.06 billion) in revenue, a 17 percent increase, and 1.2 trillion won (US$1.07 billion) in profit, a whopping 82 percent jump.