Posco's results solid in the third quarter as production up

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Posco's results solid in the third quarter as production up

Published: 23 Oct. 2020, 16:46

Posco’s steel mill in Pohang, North Gyeongsang, in May. [NEWS1]

Posco’s performance rebounded in the third quarter.

Korea’s largest steelmaker on Friday reported 14.26 trillion won ($12.59 billion) in consolidated revenue in the July-September period, up 3.9 percent from the previous quarter, and 514 billion won in net profit, up 390 percent. Its operating profit was 666.7 billion won, up 297.5 percent.

The company’s numbers were still down, as many economies globally continue to struggle with Covid-19.

Its third-quarter revenue fell 10.8 percent on year, while its operating profit was down by 35.9 percent. On-year net profit inched up 3.5 percent.

Posco said production and sales of steel has recovered to the pre-Covid-19 levels, easing pressure on fixed cost. Despite the rise in iron ore prices, Posco’s earnings were helped by the drop in the price of coal.

Sales of steel products for automobiles grew strongly as the company resumed the operation of an old blast furnace at its steel mill in Gwangyang in South Jeolla, boosting production capacity. Production of crude steel jumped 1.7 million tons, and its steel products output jumped 1.05 million tons in the third quarter compared to the previous quarter.

“Despite the difficult environment, where the price of iron ore skyrocketed, Posco has realized high profitability compared to global competitors by cutting down production cost through the use of operational technologies and smart factory,” Posco said in a statement Friday.

In line with the environmentally friendly movement, Posco said it will announce plans on how to achieve carbon neutrality in December after the government makes its scheduled announcement on the issue in that month.

“Internally, we have already made plans on how to achieve carbon neutrality,” said a spokesperson for Posco during an investment relations conference call held Friday. “Our strategies and the fields we plan to invest for technological development have been laid out.”

Posco said it will reorganize the portfolio to focus on eco-friendly industries, including electric vehicles, wind, solar energy and hydrogen cars, and strengthen the related products’ sales.

Posco International’s earnings shrank as gas production and sales volume decreased due to regular maintenance of gas platforms. Its revenue in the third quarter shrunk 17.6 percent on year to 4.51 trillion won, while its operating profit dipped 38.7 percent on year to 87 billion won.

Posco Chemical’s revenue inched up 5.3 percent on year to 378 billion won, but its operating profit was down 29.6 percent on year to 19 billion won. Its earnings improved from the second quarter on high steel production volume and cathode and anode sales.

Posco E&C maintained solid profit. Its operating profit rose 9.1 percent on year to 108 billion won, on revenue that declined 7 percent to 1.64 trillion won.

Posco projects its earnings to improve in the fourth quarter following the expected recovery of global industrial production and the expanded economic stimulus.

BY JIN MIN-JI [[email protected]]