Posco Holdings Inc. · KRX:005490
Posco — Q3 2018 Earnings Presentation
15 slides from Posco's earnings presentation, Oct 24, 2018
Slide 1: POSCO 2018 3Q Earnings Release
posco 2018 3Q Earnings Release October 23, 2018 With POSCO
Slide 2: Disclaimer
Disclaimer This presentation was prepared and circulated to release the informations regarding the company’s business performance to shareholders and investors prior to the completion of auditing for the period of the third quarter of 2018. As figures in this presentation are based on unaudited fina
Slide 3: Parent Performance (Production/Sales)
Parent Performance (Production/Sales) Production and Sales Volume Increased, Upward Trend of Sales Price Continued (thousand tons, thousand KRW/ton) 3Q 17 2Q 18 3Q 18 QoQ [QoQ Analysis] Crude Steel Production 9,755 9,377 9,565 +188 Crude steel and product production increased on more production days
Slide 4: Parent Performance (P/L)
Parent Performance (P/L) Achieved Highest Quarterly Earnings—Revenue, OP, NP since 2012 (billion KRW) 3Q 17 2Q 18 3Q 18 QoQ [QoQ Analysis] Revenue 7,255 7,705 7,906 +201 Operating profit went up by 273 billion KRW (33% h ) supported by increased sales price and decreased raw material costs Decreased
Slide 5: Consolidated Performance (P/L)
Consolidated Performance (P/L) Operating Profit Leaped on Domestic Steel and Energy Segments (billion KRW) 3Q 17 2Q 18 3Q 18 QoQ [QoQ Analysis] Revenue 15,036 16,083 16,411 +328 Strongest earnings since 2011 supported by domestic Gross Profit 1,999 2,164 2,390 +226 steel and energy businesses · Stee
Slide 6: Aggregated Earnings by Segment
Aggregated Earnings by Segment (billion KRW) Revenue Operating Profit Net Profit Segment 3Q 17 2Q 18 3Q 18 3Q 17 2Q 18 3Q 18 3Q 17 2Q 18 3Q 18 Steel 11,919 12,724 12,992 912 1,024 1,295 755 668 957 Trading 8,477 9,507 10,021 93 140 88 13 -6 36 E & C 1,821 1,824 1,886 32 86 99 31 38 22 Energy 439 450
Slide 7: Consolidated Performance (B/S)
Consolidated Performance (B/S) Current Ratio Improved on Increase of Cash Balance & Inventories (billion KRW) 3Q 17 2Q 18 3Q 18 QoQ Remarks Current Asset 30,895 33,348 35,395 +2,047 • POSCO Cash Balance(+2,185bn KRW) Cash Balance* 8,548 9,569 11,723 +2,154 : Issuance of long-term bond (1bn KRW) • A/
Slide 8: Domestic Subsidiaries (Parent-based)
Domestic Subsidiaries (Parent-based) POSCO Daewoo POSCO E&C (billion KRW ) ◾ While trading recorded strong revenue, gasfield profit decreased ◾ Non-construction segment supported operating profit to be due to pipeline repair in China maintained at last quarter level - Myanmar gas sales volume reduce
Slide 9: Overseas Subsidiaries (Parent-based)
Overseas Subsidiaries (Parent-based) PT. Krakatau POSCO Zhangjiagang STS (ZPSS) (million USD ) ◾ Highest quarterly profits on sales price increase, weaker raw material ◾ Earnings improved on weaker Ni price despite sales volume decrease price and larger plate sales volume - LME Ni price : U$/ton15,1
Slide 10: 2018 Business Plan
2018 Business Plan (trillion KRW, million tons) Business Plan 2017 (A) 2018(E) Revenue 28.6 30.7 Crude Steel Production 37.2 37.7 Parent Product Sales 34.7 35.8 Capex 1.7 3.0 Debt 3.9 4.2 Revenue 60.7 64.8 Consolidated Capex 2.6 3.7 Debt 21.1 20.9 10 2018 3Q Earnings Release October 23, 2018
Slide 11: (Appendix) Global Steel Demand
(Appendix) Global Steel Demand Chinese Steel Market Demand by Region “Strong price trend will continue supported by winter production curtailment” “Global demand forecast to grow 1.4% in 2019 on sound growth of emerging market” ✓ Supply is tight due to increasing demand, reducing trend of production
Slide 12: (Appendix) Domestic Steel Demand
(Appendix) Domestic Steel Demand Demand Industry Outlook Automobile Shipbuilding Construction ✓ Temporary drop in special consumption tax affected consumer sentiment but production slipped due to closure of GM Korea Gunsan plant and slow export ✓ Continue to recover supported by Korean shipbuilders’
Slide 13: (Appendix) Raw Materials Outlook
(Appendix) Raw Materials Outlook Iron Ore Coking Coal 2018.3Q · Positive steel market and decreasing Chinese steel mill and port inventories push iron ore price upward although uncertainties associated with trade disputes are ongoing 2018.3Q · Since then, demand for hard coking coal strengthened as
Slide 14: (Appendix) Parent-based Earnings (P/L)
(Appendix) Parent-based Earnings (P/L) 3Q Operating Profit Increased by 52% YoY, 33% QoQ (billion KRW) 2017 2018 1Q 2Q 3Q 4Q 1Q 2Q 3Q QoQ YoY Revenue 7,067 7,134 7,255 7,097 28,554 7,761 7,705 7,906 +201 +651 Cost of Goods Sold 5,843 6,133 6,083 5,774 23,833 6,290 6,431 6,354 -77 +271 Gross Profit 1
Slide 15: (Appendix) Yearly Earnings (P/L)
(Appendix) Yearly Earnings (P/L) Continuously Improved since 2015 and Recorded the Strongest Earnings since 2011 [trillion KRW] 6.00 Consolidated OP 5.00 Parent OP 4.00 Consolidated NP 3.00 Parent NP 2.00 1.00 0.00 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 -1.00 * 2018 earnings are annualized 15 2018 3Q Earni