POSCO held an IR (investor relations) conference call on July 24 and announced that it recorded 16.7 trillion won in sales and 839.1 billion won in business profit in the second quarter of 2014.
With improved profitability of POSCO and its steel production bases, its consolidated business profit reached 5%, while net income surged to 487.2 billion won, which is 102.6% up from last year, thanks to gains in foreign exchange.
POSCO alone yielded 7.4 trillion won in sales and 565.4 billion won in business profit.
Despite the weakening export competitiveness resulting from the strengthening won, POSCO recorded an operating profit to sales ratio of 7.6%, which is a slight increase from the last quarter.
POSCO`s effort to strengthen its underlying competitiveness in the steel industry led to the normalization of its overseas steel business earlier than expected, along with expansions in its customer base. Krakatau POSCO in Indonesia, which started business in January, marked a significant increase in its operating ratio in the second quarter, from 24% (in the first quarter) to 74%, while its sales volume reached 530,000 tons in the second quarter.
POSCO is now pushing ahead with efforts to restructure its non-core businesses and asset-backed securitization, while selling non-strategic business.
As announced on July 18, POSCO is considering whether to sell its urban mining business within POSCO M-TECH, as well as Gwangyang LNG Terminal, POSFINE and POSCO Uruguay.
POSCO expects that as the global steel demand shows annual raises of 3% and supply-demand balance is restored with the rapid economic recovery of advanced countries such as the United States and inventory adjustment of China, the price of steel will see a slight increase in the third quarter.
However, steel demand in Korea is expected to decrease due to a slowdown in exports, weak domestic demand and seasonal factors. To counter this and increase sales, POSCO is planning a customer-oriented marketing campaign for tis high-value added products.
Meanwhile, POSCO announced that its sales goal in 2014 was 64.5 trillion won on a consolidated business and 30 trillion won on its own.