- On the 25th, announced 1Q revenue of 7.8 trillion won and operating profit of
265 billion won
- Stable profit structure of the energy business value chain
and increased sales to the eco-friendly industry customers
contributed to profit growth
- Secured a stable cash flow foundation to support future
investment and improve shareholder returns
SEOUL and INCHEON, South Korea, April 25,
2024 /PRNewswire/ -- Despite the ongoing global
economic slowdown due to high interest rate and increased
volatility in energy prices, POSCO International's performance
remains solid throughout the first quarter of 2024.
POSCO International (CEO Lee
Kye-In) announced through disclosure that its first quarter
sales were 7.8 trillion won with
operating profit of 265 billion won.
The company demonstrated stable profit generation and capability of
sustainable growth with a 23.6% increase in operating profit
compared to the previous quarter. This performance exceeded the
operating profit consensus of 245 billion
won by 8%.
Despite the front industry slump, the company's performance in
the first quarter remained robust. This can be attributed to the
company's stable profit structure created by the LNG (liquefied
natural gas) value chain and the steady performance in the
eco-friendly materials business. These factors are the key drivers
behind the performance.
Firstly, in the energy sector, the upstream global gas
exploration business continued to generate steady sales of natural
gas, resulting in an operating profit of approximately 64 billion won, similar to the previous quarter.
In the midstream sector, the LNG terminal achieved sales of
27 billion won by increasing the
intake volume at low LNG prices through capacity expansion and
operational optimization. This represented in an increase of over
26.3% in sales compared to the same period last year.
For the downstream LNG power generation, the company achieved an
operating profit of 60 billion won, a
11.5% increase compared to the same period last year, by securing
competitive fuel import prices.
POSCO International plans to invest 3.6
trillion won by 2026 to enhance the LNG value chain, which
includes production increase of existing gas fields, exploring new
reserves, and doubling the capacity of LNG terminals.
Regardless of the downturn in the global steel industry, the
eco-friendly materials business's performance stood out. In
particular, strong sales of API steel* exports to the United States and high-strength steel
plates for EVs contributed to a 24.8% increase in operating profit
compared to the previous quarter, reaching 79 billion won.
* Steel products used in the manufacturing of oil and gas
pipelines.
In addition, even with the slowdown of the EV industry, motor
core sales for domestic markets increased by 6.3% compared to the
same period last year, while overseas sales increased by 22%. From
the first half of this year, Mexico plant number 1 has started production
and the groundbreaking ceremonies for Mexico plant number 2 is scheduled in May and
Poland plant is expected in June
of 2024. Expansion of overseas production share and an increase in
production volume is expected to lead profitability improvement in
the future.
Permanent magnets orders received at the beginning of this year
through North American and European overseas subsidiaries are
planned to be produced by using rare earth materials sourced from
the United States, Australia, Vietnam, etc. This initiative aims to
establish a supply chain for rare earth sourced outside of
China. Furthermore, the company is
expanding the value chain to strengthen its position as a key
supplier of core components for eco-friendly vehicles.
Meanwhile, POSCO International is also making efforts to improve
its financial stability. Net debt for the first quarter is
5.9 trillion won and debt to equity
ratio is 73.1%. With debt repayment, net debt was reduced by
549 billion won, which is an 8.5%
decrease compared to the same period last year. Also, EBITDA
recorded 400 billion won securing
cash for future investments and shareholder returns.
A POSCO International official stated "In January, we announced
our shareholder-friendly policy and starting this year we will be
thoroughly considering interim dividends. If approved, as of
June 30th, in accordance
with the articles of incorporation, shareholders will be eligible
for interim dividends. We are committed to enhancing shareholder
value based on steady profit."
For more information, please visit
https://www.poscointl.com/.
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SOURCE POSCO International