South Korea’s top steelmaker POSCO posted its highest operating profit in the third quarter this year since 2011. Despite strengthening global protectionism and unfavorable factors in trading, the company has put up a good show by diversifying export markets and increasing the proportion of domestic sales since new chairman Choi Jeong-woo took office in July this year.
POSCO announced on October 23 that it recorded sales of 16.41 trillion won (US$14.43 billion), operating profit of 1.53 trillion won (US$1.35 billion) and net profit of 1.06 trillion won (US$929.85 million) in the third quarter on a consolidated basis.
POSCO said it performed well across the board, from steel and construction to energy. The sales grew 9.1 percent from the same period a year ago, while the operating profit and net profit jumped 36 percent and 16.7 percent, respectively. The steelmaker has kept up a hot streak of 1-trillion-won-plus profit for the fifth straight quarter.
POSCO also achieved the highest results since 2012 on an individual basis. Sales increased 9 percent from a year earlier to reach 7.91 trillion won (US$6.95 billion), while the operating profits rose 51.7 percent to 1.1 trillion won (US$962.46 million). Its operating margin rose 3.9 percentage points to 13.8 percent on-year, accomplishing a two-digit figure for four consecutive quarters.
POSCO was able to put up a good show as its affiliates showed an even growth. In addition, the increase in prices also boosted sales as the company expanded the proportion of domestic sales with the worsening export environment.
POSCO said that PT. Krakatau POSCO, its joint venture with Krakatau Steel in Indonesia, reported its best-ever quarterly profit since its inception in 2014, and performance of POSCO Energy, which struggled in the previous quarter, also turned around in the latest three months, boosting the group’s performance as a whole.
The pressure on exports owing to global protectionism had a smaller impact than initial concerns. POSCO has lowered the adverse effect by proactively reducing exports from 1 million tons a year by 30 percent last year after 2016 when the United States has started imposing high tariffs on steel products.
POSCO upped its sales estimate for this year as its performance continuously showed a rising curve. The company raised its consolidated and individual sales target for this year by 2.9 trillion won (US$2.55 billion) and 1.7 trillion won (US$1.49 billion) to 64.8 trillion won (US$56.97 billion) and 30.7 trillion won (US$26.99 billion), respectively.