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Non-Energy Minerals

POSCO

Company Background

Posco, South Korea's largest steelmaker, produced 41.48 million tons of crude steel in 2014. That made it No. 5 in the world.

Domestic production is concentrated at two integrated mills with blast furnaces, located in the cities of Pohang, North Gyeongsang Province, and Gwangyang, South Jeolla Province.

The company also set up Southeast Asia's first blast furnace in the western part of Java, Indonesia, in a joint venture with Indonesian state-run enterprise Krakatau Steel.

The Pohang steelworks, South Korea's first plant with a blast furnace, came onstream in 1973. It was primarily funded with grants and soft loans provided by Japan in lieu of war reparations, based on the countries' 1965 treaty on basic relations.

Since the plant opened, Posco has underpinned South Korea's industrialization efforts. In 2000, the company was fully privatized after government-affiliated Korea Development Bank sold its entire stake.

For years, Posco was the dominant supplier of high-end steel plate to domestic customers. Today, the company is locked in a rivalry with Hyundai Steel, which belongs to the Hyundai Motor group and runs three domestic blast furnaces.

The competition centers on steel plate for automobiles and planks for ships.

In response to a surge in Chinese steel production, Posco has sought other revenue sources in recent years, such as trading and energy. Acquisitions, however, swelled the company's debt. Chairman Kwon Oh-joon, who took office in March 2014, said the company would reconsider its diversification strategy and refocus on steelmaking.

Posco is looking to land more orders from not only South Korean companies but also Japanese, European and other global automakers. It aims to leverage its Chinese and Mexican plants for hot-dip galvanized steel plate, used in cars.

The company supplies magnesium sheet, a new type of material, to German automaker Porsche.

Business Summary

POSCO engages in the production of steel products. It operates through the following divisions: Steel, Engineering & Construction and Trading. The Steel division produces cold rolled, hot rolled and stain less steel products, plates, wire rods and silicon steel sheets. The Engineering & Construction division engages in the planning, designing and construction of industrial plants, civil engineering projects, commercial and residential buildings. The Trading division exports and imports steel products and raw materials. The company was founded by Tae-Joon Park on April 1, 1968 and is headquartered in Pohang, South Korea.

Financial Highlights

Dec 2019 KRWUSD
Revenue64,366.84B55,194.40M
Gross Profit6,396.30B5,484.81M
Operating income3,788.53B3,248.65M
Income before tax2,779.53B2,383.44M
Net income1,828.41B1,567.86M
EBITDA7,249.64B6,216.55M
Diluted EPS22,822.7519.57
Dividends Per Share10,0008.57
Total Assets79,058.66B68,363.23M
Total liabilities31,463.33B27,206.83M
Total equity44,272.48B38,283.09M
Operating cash flow5,988.16B5,134.83M
Currency in KRWCurrency in USD

Historical Data

 Dec 2015Dec 2016Dec 2017Dec 2018Dec 2019
Revenue 58,192.34B 53,083.51B 60,655.09B 64,977.77B 64,366.84B
Gross Profit 6,616.42B 6,794.74B 8,473.42B 8,176.93B 6,396.30B
Operating income 2,262.42B 2,830.77B 4,523.65B 5,479.50B 3,788.53B
Income before tax 686,811.66M 1,521.53B 4,179.69B 3,562.82B 2,779.53B
Net income 147,617.24M 1,330.08B 2,757.05B 1,672.89B 1,828.41B
EBITDA 5,480.67B 6,020.60B 7,821.07B 8,747.13B 7,249.64B
Diluted EPS 1,845 16,627 34,463.81 20,910.98 22,822.75
Dividends Per Share 8,000 8,000 8,000 10,000 10,000
Total Assets 80,408.75B 79,762.99B 79,024.95B 78,248.26B 79,058.66B
Total liabilities 36,335.45B 34,921.51B 32,557.86B 31,688.09B 31,463.33B
Total equity 40,238.43B 41,376.51B 42,735.95B 43,171.87B 44,272.48B
Operating cash flow 7,534.10B 5,201.32B 5,539.52B 5,823.55B 5,988.16B
 Dec 2015Dec 2016Dec 2017Dec 2018Dec 2019
Revenue 51,415.59M 45,754.16M 53,652.85M 59,042.90M 55,194.40M
Gross Profit 5,845.91M 5,856.57M 7,495.22M 7,430.08M 5,484.81M
Operating income 1,998.95M 2,439.92M 4,001.42M 4,979.02M 3,248.65M
Income before tax 606.82M 1,311.44M 3,697.17M 3,237.40M 2,383.44M
Net income 130.42M 1,146.43M 2,438.77M 1,520.09M 1,567.86M
EBITDA 4,842.42M 5,189.32M 6,918.18M 7,948.19M 6,216.55M
Diluted EPS 1.63 14.33 30.48 19.00 19.57
Dividends Per Share 7.06 6.89 7.07 9.08 8.57
Total Assets 68,575.97M 66,039.89M 73,817.15M 70,127.49M 68,363.23M
Total liabilities 30,988.40M 28,913.32M 30,412.28M 28,399.44M 27,206.83M
Total equity 34,317.02M 34,257.75M 39,919.62M 38,691.40M 38,283.09M
Operating cash flow 6,656.72M 4,483.16M 4,900.02M 5,291.65M 5,134.83M

Valuation Measures

Dec 2019
PER10.36
ROA2.32%
ROE4.18%
Operating margin5.88%
Profit margin2.84%

Key executives

  • Co-Chief Executive Officer & Director: Jeong-Woo Choi
  • Co-President, Co-CEO & Director: In-Hwa Chang
  • Senior Managing Director & Head-Finance: Seung-Kyu Lim
  • Head-Legal & Compliance Support: Seong-Wook Lee
  • Director & Senior Executive Vice President: Hag-Dong Kim

Shareholders

  • National Pension Service of Korea (11.4%)
  • POSCO (8.6%)
  • NIPPON STEEL CORP. (3.3%)
  • The Vanguard Group, Inc. (2.1%)
  • GIC Pte Ltd. (Investment Management) (2.0%)
  • BlackRock Fund Advisors (1.9%)
  • Dimensional Fund Advisors LP (1.1%)
  • Fidelity Management & Research Co. LLC (1.1%)
  • BlackRock Advisors (UK) Ltd. (0.5%)
  • APG Asset Management NV (0.4%)

Contact Details

  • Website:http://www.posco.com
  • Address: POSCO Center, 892 Daechi 4-dong, Seoul, 06194, South Korea
  • Phone: +82.2.3457.0114

Related Companies

  • Posco Coated Steel (Thailand) Co. Ltd.
  • Incheon-Gimpo Highway Co., Ltd.
  • Posco Venture Partners
  • Posco Singapore LNG Trading Pte Ltd.
  • Daewoo International (M) Sdn. Bhd.
  • POSCO Philippine Manila Processing Center, Inc.
  • HONG KONG POSCO E&C (CHINA) Investment Co. Ltd.
  • POSCO India Holdings Pvt Ltd.
  • Clean Po-hang Co., Ltd.
  • Sebang Steel Co. Ltd.
  • Posco Mexico Human Tech SA de CV
  • HKT Bearings Ltd.
  • POSCO China Suzhou Processing Center Co., Ltd.
  • POS-Minerals Corp.
  • POSCO Australia GP Pty Ltd.
  • Posteel Co., Ltd. (South Korea)
  • POSCO Vietnam Holdings Co. Ltd.
  • Posmateinsure Insurance Broker Co., Ltd.
  • POSBRO Co., Ltd.
  • Chuncheon Clean Water Load Co., Ltd.
  • Poscoenc Housing Planning Co., Ltd.
  • POSPlate Co., Ltd.
  • NRT Korea Co., Ltd.
  • Suncheon Eco Trans Co., Ltd.
  • Blue O&M Co., Ltd.
  • PoHang Fuel Cell Co., Ltd.
  • Pohang Scrap Recycling Center Co., Ltd.
  • Mapo Hibroad Parking Co., Ltd.
  • Basys Industry Co., Ltd.
  • Cheongna IBT Co., Ltd.

Competitors

  • JSW Steel Limited
  • NIPPON STEEL CORP.
  • Severstal PAO
  • ArcelorMittal SA
  • voestalpine AG
  • Hyundai Steel Company
  • Baoshan Iron & Steel Co., Ltd. Class A
  • Novolipetsk Steel
  • Nucor Corporation
  • Evraz PLC
  • DB Inc.
  • Hanjin Heavy Industries & Construction Holdings Co., Ltd.
  • SeAH Holdings Corporation
  • Dongbu Corporation
  • Iljin Materials Co., Ltd.
  • Dongkuk Industries Co., Ltd.
  • Kumho Industrial Co., Ltd.
  • Hanjin Heavy Industries & Construction Co., Ltd
  • Kye-Ryong Construction Industrial Co., Ltd.
  • Ternium S.A. Sponsored ADR
  • MMC Norilsk Nickel PJSC
  • Daiyang Metal Co., Ltd.
  • Bookook Steel Co., Ltd.
  • Chosun Refractories Co., Ltd
  • PBG S.A.
  • Outokumpu Oyj
  • Champion Iron Ltd.
  • Nemaska Lithium Inc.
  • Orbite Technologies Inc. Class A
Last Updated on 21 Oct, 2020

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