POSCO

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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	KRW	USD
Revenue	64,366.84B	55,194.40M
Gross Profit	6,396.30B	5,484.81M
Operating income	3,788.53B	3,248.65M
Income before tax	2,779.53B	2,383.44M
Net income	1,828.41B	1,567.86M
EBITDA	7,249.64B	6,216.55M
Diluted EPS	22,822.75	19.57
Dividends Per Share	10,000	8.57
Total Assets	79,058.66B	68,363.23M
Total liabilities	31,463.33B	27,206.83M
Total equity	44,272.48B	38,283.09M
Operating cash flow	5,988.16B	5,134.83M
	Currency in KRW	Currency in USD

Historical Data

KRW | USD

	Dec 2015	Dec 2016	Dec 2017	Dec 2018	Dec 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 2015	Dec 2016	Dec 2017	Dec 2018	Dec 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
PER	10.36
ROA	2.32%
ROE	4.18%
Operating margin	5.88%
Profit margin	2.84%

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 (12.1%)
POSCO (8.1%)
NIPPON STEEL CORP. (3.3%)
The Vanguard Group, Inc. (2.1%)
GIC Pte Ltd. (Investment Management) (2.0%)
BlackRock Fund Advisors (1.9%)
Samsung Asset Management Co., Ltd. (1.4%)
Dimensional Fund Advisors LP (1.1%)
Fidelity Management & Research Co. LLC (1.0%)
BlackRock Advisors (UK) Ltd. (0.5%)

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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Competitors

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

Last Updated on 14 Jul, 2020