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| A POSCO flag stands alongside a Korean flag at the main gate of the steelmaker's headquarters in southern Seoul's Gangnam District in this undated photo. Korea Times file |
Steelmaker's sales surpasses W70 tril. mark, operating profit exceeds W9 tril. mark
By Yi Whan-woo
POSCO estimated Wednesday that its annual sales for 2021 will surpass the 70 trillion won ($58.8 billion) mark and its operating profit will exceed 9 trillion won for the first time.
In a preliminary earnings guideline, the country's largest steelmaker said that it logged 76.4 trillion won in sales last year, up 32.1 percent year-on-year. The 2021 operating profit grew 283.8 percent from a year earlier to 9.2 trillion won.
The conglomerate attributed the strong performance to increased steel demand amid the global economic recovery. The trend was consistent despite a price surge in coal in the fourth quarter that led to a hike in the manufacturing costs of steel and other energy-intensive industries.
Sales saw an upward trend throughout 2021: 16 trillion in the first quarter, 18.2 trillion won in the second, 20.6 trillion in the third and 21.4 trillion won in the fourth.
Operating profit, on the other hand, slipped to 2.3 trillion in the October-December period, after posting 1.5 trillion won, 2.2 trillion won and 3.1 trillion won for the preceding three quarters respectively.
"The fourth quarter of the year is considered an off-peak season," a source familiar with POSCO said on condition of anonymity. "The coal price hike is also a reason behind the fall in operating profit for October-December."
A Meritz Securities analyst assessed that the increase rate in the sales price was not as drastic as that of manufacturing costs, heavily affected by the coal crunch in China.
Market observers speculated that the outlook for the first quarter of 2022 will be bright, noting that the price of iron ore is declining and the international steel price is stabilizing.
They also viewed that POSCO's transition to a holding company by splitting off its steel operation adds to the positive outlook.
Introduced on Dec. 10, the transition awaits the consensus of shareholders during their interim meeting slated for Jan. 28.
It is aimed to restructure the firm's steel-oriented business portfolio and diversify it in accordance with toughened global carbon neutrality goals and the Fourth Industrial Revolution.
The holding company will accordingly seek balanced growth in steel, as well as secondary battery materials, lithium, nickel, hydrogen energy, infrastructure and food businesses as core items.
"POSCO's steel operation is still somewhat underrated in terms of valuation and this great transition will certainly help increase its earnings as it materializes," a source said.
