Posco Holdings Inc. · KRX:005490
Posco — Q2 2017 Earnings Presentation
15 slides from Posco's earnings presentation, Jul 20, 2017
Slide 1: POSCO 2017 2Q Earnings Release
July 20, 2017 POSCO 2017 2Q Earnings Release Exhibit 99.1
Slide 2: Disclaimer
This presentation was prepared to release the company’s 2Q 2017 business performance prior to the completion of auditing for the purpose of providing information to shareholders and investors. As figures in this presentation are based on unaudited financial statements, certain contents may be subjec
Slide 3: Parent Performance (Production / Sales)
Parent Performance (Production / Sales) 2Q Business Performance 2Q 16 1Q 17 2Q 17 QoQ Crude Steel Production 9,007 9,081 8,801 -280 Product Production 8,861 8,706 8,520 -186 STS 502 481 518 37 Product Sales 9,005 8,722 8,463 -259 STS 513 483 509 26 Carbon Steel Sales Price 557 671 705 34 WP Sales Ra
Slide 4: Parent Performance
Parent Performance 2Q 16 1Q 17 2Q 17 QoQ Revenue 6,010 7,067 7,134 67 Cost of Goods Sold 4,851 5,843 6,133 290 Gross Profit 1,159 1,224 1,001 -223 (Gross Margin) (19.3%) (17.3%) (14.0%) - SG&A 446 429 416 -13 Operating Profit 713 795 585 -210 (Operating Margin) (11.9%) (11.3%) (8.2%) - Non-Operating
Slide 5: Consolidated Performance
Consolidated Performance Operating profit variance 2Q Earnings Release │ July 20, 2017 (billion KRW) 1Q 17 2Q 17 QoQ Steel 1,023 715 -308 POSCO 795 585 -210 Non-Steel 394 253 -141 Total 1,417 968 -449 [ Aggregation of Operating Profit ] Net profit variance (billion KRW) ○ Steel: Lower profit due to
Slide 6: Consolidated Performance (B/S)
Consolidated Performance (B/S) *Cash Balance : Cash and cash equivalents, Short-term financial instruments, Short-term tradable securities, Short-term available for sale securities, Current portion of held-to-maturity securities ** Includes other bonds 2Q Earnings Release │ July 20, 2017 2Q 16 1Q 17
Slide 7: Aggregated Earnings by Segment
2Q Earnings Release │ July 20, 2017 Aggregated Earnings by Segment Segment Revenue Operating Profit Net Profit 2Q16 1Q17 2Q17 2Q16 1Q17 2Q17 2Q16 1Q17 2Q17 Steel 10,609 12,259 11,597 734 1,023 715 170 1,009 535 Trading 6,110 8,279 9,586 86 127 103 32 78 15 E & C 1,784 1,737 1,808 -170 135 65 -162 91
Slide 8: Subsidiary Performance (Daewoo/E&C)
Subsidiary Performance (Daewoo/E&C) 8 POSCO Daewoo POSCO E&C Strong trading business contributed to revenue growth ○ Steel sales volume up by 540 thousand tons(+22%) 2Q Earnings Release │ July 20, 2017 OP declined due to additional project cost recognition and F/X impact Gas production and sales vol
Slide 9: Subsidiary Performance (Energy/Chemtech)
Subsidiary Performance (Energy/Chemtech) POSCO Energy POSCO Chemtech 2Q Earnings Release │ July 20, 2017 Revenue & OP dropped due to reduced power generation from seasonality and CP unit price cut Production and supply of anode materials went up Sales of refractories and chemical businesses continuo
Slide 10: Subsidiary Performance (ICT/PT.KP)
Subsidiary Performance (ICT/PT.KP) POSCO ICT 2Q Earnings Release │ July 20, 2017 Business Activities ○ Entered into Smart B&C* business PT. Krakatau POSCO Revenue and operating profit fell as large-scale projects in EIC division declined ○ Sales volume (thousand tons) - 1Q) 715 → 2Q) 656 Loss narrow
Slide 11: Subsidiary Performance (Maharashtra/ZPSS)
Subsidiary Performance (Maharashtra/ZPSS) POSCO Maharashtra 2Q Earnings Release │ July 20, 2017 ZPSS (Jiangjiagang STS) 2Q 16 1Q 17 2Q 17 QoQ Revenue 198 304 376 72 Operating Profit 4 39 37 -2 (Operating Margin) (2.1%) (12.7%) (9.9%) - Net Profit -18 54 26 -28 (Net Margin) (-9.1%) (17.9%) (7.0%) - 2
Slide 12: Business Plan & Projection
Business Plan & Projection 2Q Earnings Release │ July 20, 2017 (trillion KRW, million tons) Business Plan 2016 2017 Plan Projection POSCO Revenue 24.3 25.6 28.4 Crude Steel Production 37.5 37.0 37.0 Product Sales 35.9 34.6 35.1 Capex 2.0 2.6 2.4 Net Debt -0.1 -1.4 -1.6 Consolidated Revenue 53.1 54.8
Slide 13: Global Steel Market
Global Steel Market 2Q Earnings Release │ July 20, 2017 China’s Steel Market Global Steel Demand “Steel price turned upward on tight supply due to inventory reduction” “Continue to be on increase driven by advanced countries’ recovery and emerging countries’ sound demand” China’s steel demand expect
Slide 14: Domestic Steel Market
Domestic Steel Market 2Q Earnings Release │ July 20, 2017 2014 2015 2016 2017(f) 1Q 2Q 3Q YoY Nominal Consumption 55.5 55.8 57.1 56.5 14.3 14.6 14.1 - 7.1% Export 32.3 31.6 31.0 31.6 8.0 7.8 7.8 - 1.6% Production 74.1 74.1 74.3 76.3 19.1 19.4 19.0 - 2.3% Import 13.7 13.2 13.7 11.8 3.2 2.9 2.9 - 20.6
Slide 15: Raw Materials Outlook
Raw Materials Outlook Iron Ore 2Q 17 3Q 17 (US$/ton) [ Iron Ore Price ] *62% Fe IODEX CFR China (Quarterly Average Spot Price) 2015 3Q 2015 4Q 2016 1Q 2016 2Q 2016 4Q 2017 1Q 2017 2Q 55 46 48 55 58 70 86 2016 3Q “3Q fine ore price forecast at U$60~65/ton” Strong steel price stimulated iron ore resto