POSCO Reports Record High Operating Profit of 2.2 Trillion KRW in 2Q (Comprehensive)
[Asia Economy Reporter Choi Dae-yeol] POSCO announced on the 9th that its preliminary operating profit for the second quarter reached 2.2014 trillion KRW (consolidated basis). This is the first time the company's quarterly operating profit has exceeded 2 trillion KRW. The figure is higher than the 1.9 trillion KRW level initially expected by the securities industry, which anticipated strong performance.
According to the preliminary second-quarter results announced by the company, operating profit increased by 1,213% compared to the same period last year. It also rose 42% compared to the previous first quarter. Sales amounted to 18.2289 trillion KRW, a 33% increase from the same period last year. On a separate basis, operating profit turned positive at 1.6081 trillion KRW, recovering from a loss in the second quarter of last year. Sales on this basis rose 58% to 9.2774 trillion KRW.
Until now, the highest quarterly operating profit POSCO had recorded was in the second quarter of 2011 (1.7 trillion KRW). Even in the first quarter of this year, the operating profit was 1.552 trillion KRW, the highest level in the past 10 years, but the record was broken in just one quarter.
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The significant improvement in performance is attributed to increased steel demand driven by expectations of economic recovery. For several years, downstream industries such as shipbuilding and construction have been sluggish, resulting in many instances where steel products could not be sold at proper prices. However, steel prices have risen this year, improving profitability. The oversupply issue in China, the world's largest steel producer, has been resolved, and due to environmental regulations, it is widely expected that global major steelmakers will not expand their facilities going forward. Therefore, the steel supply and demand situation is expected to remain favorable for suppliers like POSCO for the time being.
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