Posco surpasses W2tr in quarterly operating profit for first time

South Korea’s leading steelmaker Posco saw its best-ever performance in the second quarter this year, the company announced Thursday, surpassing the 2 trillion won ($1.7 billion) mark in quarterly operating profit for the first time since the company opened up earnings to public in 2006.

Posco and its affiliates posted a combined operating profit of 2.2 trillion won in the second quarter this year, achieving a whopping 1,212.2 percent on-year increase. The combined sales stood at 18.3 trillion won, up 33.3 percent on-year, and the net profit was 1.8 trillion won in the same period, according to the steelmaker‘s regulatory filing.

The recovery of the steel industry due to increased demand, especially from the shipbuilding and electronic appliances industries, contributed to the upbeat performance, Posco said, adding that the rise in steel prices played a key role in boosting their operating profit.

Posco alone posted 9.27 trillion won in sales, with an operating profit of 1.6 trillion won and a net profit of 1.3 trillion won in the second quarter. This was the biggest improvement for the steelmaker since the third quarter in 2010, the company explained.

With the record sales performance, Posco readjusted this year’s sales goal and investment budget. Posco and its affiliates set its combined sales goal to 66.4 trillion won for the year from 63.2 trillion won, and to 37 trillion won for Posco, independently. For investment, Posco and affiliates will spend 6.4 trillion won, with Posco, alone, setting the investment budget to 4.2 trillion won, the company said.

Posco said it aims to produce 38.2 million tons of steel and sell 35.6 million tons of products this year.

In the global infrastructure sector, Posco International, the group’s trading arm, witnessed a sales increase in its steel and food business, while Posco Chemical expanded its secondary battery business.

The steelmaker gave a rosy outlook for the latter half of this year, as demand for steel is expected to continue.

With China, the world’s largest supplier and also the largest consumer of steel, limiting its domestic production of steel to control carbon emissions and stabilize steel prices, Posco said it expects its sales to remain strong throughout the year.

Posco said it will work to expand its steel production capacity to 60 million tons by 2030. The company’s global steel production volume was 46 million tons in 2020.

By Jo He-rim (herim@heraldcorp.com)