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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 2020 KRWUSD
Revenue57,792.79B48,981.60M
Gross Profit4,810.52B4,077.10M
Operating income2,349.38B1,991.19M
Income before tax1,891.78B1,603.36M
Net income1,595.45B1,352.21M
EBITDA5,971.12B5,060.75M
Diluted EPS20,164.8117.09
Dividends Per Share8,0006.78
Total Assets79,086.97B72,803.98M
Total liabilities31,611.76B29,100.39M
Total equity44,131.96B40,625.94M
Operating cash flow8,669.19B7,347.47M
Currency in KRWCurrency in USD

Historical Data

 Dec 2016Dec 2017Dec 2018Dec 2019Dec 2020
Revenue 53,083.51B 60,655.09B 64,977.77B 64,366.84B 57,792.79B
Gross Profit 6,794.74B 8,473.42B 8,176.93B 6,396.30B 4,810.52B
Operating income 2,830.77B 4,523.65B 5,479.50B 3,788.53B 2,349.38B
Income before tax 1,521.53B 4,179.69B 3,562.82B 2,779.53B 1,891.78B
Net income 1,330.08B 2,757.05B 1,672.89B 1,828.41B 1,595.45B
EBITDA 6,020.60B 7,821.07B 8,747.13B 7,249.64B 5,971.12B
Diluted EPS 16,627 34,463.81 20,910.98 22,822.75 20,164.81
Dividends Per Share 8,000 8,000 10,000 10,000 8,000
Total Assets 79,762.99B 79,024.95B 78,248.26B 79,058.66B 79,086.97B
Total liabilities 34,921.51B 32,557.86B 31,688.09B 31,463.33B 31,611.76B
Total equity 41,376.51B 42,735.95B 43,171.87B 44,272.48B 44,131.96B
Operating cash flow 5,201.32B 5,539.52B 5,823.55B 5,988.16B 8,669.19B
 Dec 2016Dec 2017Dec 2018Dec 2019Dec 2020
Revenue 45,754.16M 53,652.85M 59,042.90M 55,194.40M 48,981.60M
Gross Profit 5,856.57M 7,495.22M 7,430.08M 5,484.81M 4,077.10M
Operating income 2,439.92M 4,001.42M 4,979.02M 3,248.65M 1,991.19M
Income before tax 1,311.44M 3,697.17M 3,237.40M 2,383.44M 1,603.36M
Net income 1,146.43M 2,438.77M 1,520.09M 1,567.86M 1,352.21M
EBITDA 5,189.32M 6,918.18M 7,948.19M 6,216.55M 5,060.75M
Diluted EPS 14.33 30.48 19.00 19.57 17.09
Dividends Per Share 6.89 7.07 9.08 8.57 6.78
Total Assets 66,039.89M 73,817.15M 70,127.49M 68,363.23M 72,803.98M
Total liabilities 28,913.32M 30,412.28M 28,399.44M 27,206.83M 29,100.39M
Total equity 34,257.75M 39,919.62M 38,691.40M 38,283.09M 40,625.94M
Operating cash flow 4,483.16M 4,900.02M 5,291.65M 5,134.83M 7,347.47M

Valuation Measures

Dec 2020
PER13.48
ROA2.01%
ROE3.60%
Operating margin4.06%
Profit margin2.76%

Key executives

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

Shareholders

  • POSCO (9.8%)
  • National Pension Service of Korea (9.7%)
  • NIPPON STEEL CORP. (3.3%)
  • BlackRock Fund Advisors (2.1%)
  • GIC Pte Ltd. (Investment Management) (1.9%)
  • The Vanguard Group, Inc. (1.7%)
  • Fidelity Management & Research Co. LLC (1.7%)
  • POSCO Employee Stock Ownership Association (1.6%)
  • Samsung Asset Management Co., Ltd. (0.8%)
  • AllianceBernstein LP (0.8%)

Contact Details

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

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  • DAESAN (CAMBODIA) Co., Ltd.
  • PGSF LP
  • PT POSCO Indonesia Inti
  • POSCO Mauritius Ltd.
  • POSCO WA Pty Ltd.
  • POSCO NCR Coal Ltd.
  • POSCO America Alabama Processing Center Co. Ltd.
  • POSCO TNPC Otomotiv Celik San. ve Tic. AS
  • POSCO India Processing Center Pvt Ltd.
  • POSCO RU LLC
  • PT Krakatau POSCO Social Enterprise
  • POSMATE-China Co., Ltd.
  • POSCO-Mexico Villagran Wire-rod Processing Center
  • POSCO-Italy Processing Center
  • POSCO Africa (Pty) Ltd.
  • Hunchun Posco Hyundai Logistics
  • IMP Fund I
  • Posco New Growth
  • POSCO O&M CO., Ltd.
  • Uitrans Co., Ltd.
  • POSCO Research & Technology
  • POSCO Coated Steel (Thailand) Co., Ltd.
  • Incheon-Gimpo Highway Co., Ltd.
  • SPH Co., Ltd.
  • POSCO Group University Co., Ltd.
  • Myanmar POSCO C&C Co., Ltd.
  • Posco Venture Partners
  • Posco Singapore LNG Trading Pte Ltd.

Competitors

  • Baoshan Iron & Steel Co., Ltd. Class A
  • GS Holdings Corp.
  • NIPPON STEEL CORP.
  • ArcelorMittal SA
  • Hyundai Steel Company
  • Korea Electric Power Corporation
  • POSCO M-TECH Co., Ltd.
  • S-Oil Corporation
  • Korea Gas Corporation
  • PJ Metal Co., Ltd.
  • SK Inc.
  • DB Inc.
  • SeAH Holdings Corporation
  • ILJIN MATERIALS CO., LTD.
  • Dongkuk Industries Co., Ltd.
  • KUMHO Engineering & Construction Co., Ltd.
  • Hanjin Heavy Industries & Construction Co., Ltd
  • Dongbu Corporation
  • Kye-Ryong Construction Industrial Co., Ltd.
  • POSCO Chemical Co., Ltd.
  • Ternium S.A. Sponsored ADR
  • Daiyang Metal Co., Ltd.
  • Bookook Steel Co., Ltd.
  • Chosun Refractories Co., Ltd
  • PBG S.A.
  • Outokumpu Oyj
  • Orbite Technologies Inc. Class A
Last Updated on 3 Dec, 2021

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