POSCO Meets First Quarter Expectations... Concerns Arise for Second Quarter

[Asia Economy Reporter Oh Ju-yeon] KB Securities analyzed that POSCO's first-quarter performance this year met market consensus, but the second quarter looks burdensome.

POSCO's consolidated sales and operating profit for the first quarter of this year were 14.5458 trillion KRW and 705.3 billion KRW, respectively, exceeding market estimates.

Hong Seong-woo, a researcher at KB Securities, evaluated, "Despite a decrease in sales volume and a drop in selling prices compared to the previous quarter, profitability improved due to a decline in raw material prices." He added that the rise in the KRW-USD exchange rate also worked favorably for export competitiveness, contributing to the defense of ASP (Average Selling Price).

However, the outlook for the second quarter is somewhat concerning.

Researcher Hong predicted, "Domestic distribution prices typically lag behind China's domestic prices by 30 to 45 days, so downward pressure on domestic prices is expected to intensify in the second quarter, and the exchange rate effect may also weaken."

POSCO presented its 2020 guidance with sales lowered by 9.8% from the previous forecast to 57.5363 trillion KRW, and investment costs reduced by 13.3% from the previous forecast to 5.2246 trillion KRW.

This content was produced with the assistance of AI translation services.