Slide 1: 1H 2005 Operating Performance
1H 2005 Operating Performance July 8, 2005 EX-99.1 PERFORMANCE IN 1H 2005 OF POSCO
Slide 2: Unaudited figures notice
Figures provided in this presentation are based on unaudited financial statements of the Company for the first half of 2005 and have been prepared solely for the convenience of investors. Certain contents in this presentation are subject to change during the course of auditing process. The financial
Slide 3: Table of Contents
I. 1H05 Operating Performance II. Key Management Initiatives III. Steel Industry Environment IV. 2005 Business Plan Table of Contents
Slide 4: Production/Sales
Production/Sales (In thousand tons) 2004 2004 2005 1H 1H 2H 2005 1H YOY (%) Crude Steel Crude Steel 14,790 15,414 14,989 1.3 Finished Products(FP) Finished Products(FP) 14,431 14,984 14,420 ^0.1 FP Sales FP Sales 14,344 14,858 14,185 ^1.1 Domestic 10,602 11,288 10,588 ^0.1 Export (%) 3,742 (26.1) 3,
Slide 5: Sales by Product
Sales by Product (In thousand tons) 2004 2004 2005 1H 1H 2H 2005 1H YoY(%) Hot Rolled 5,063 5,160 4,560 ^9.9 Plate 1,603 1,703 1,408 ^12.2 Wire Rod 995 1,019 1,033 3.8 Cold Rolled 4,813 5,031 5,288 9.9 Electric Steel 358 343 389 8.6 Stainless 969 968 955 ^1.4 Others 543 634 552 1.6 Total 14,344 14,8
Slide 6: Income Statement Summary
Income Statement Summary (In billion KRW) 2004 2004 2005 1H 1H 2H 2005 1H YoY(%) Sales Sales 9,039 10,753 11,034 22.1 COGS COGS 6,377 7,330 7,020 10.1 Operating Income Operating Income 2,196 2,858 3,504 59.6 Opr. Margin 24.3 26.6 31.8 - Net Profit Net Profit 1,635 2,191 2,570 57.2 Profit Margin 18.1
Slide 7: Financial Structure
Financial Structure (In billion KRW) 2004 2004 2005 1H 1H 2H 2005 1H Asset Asset 19,244 21,367 22,344 Current Assets Fixed Assets 6,193 13,051 7,742 13,625 8,143 14,201 Liabilities Liabilities 5,150 5,257 4,564 Debt 2,991 2,498 1,882 Shareholder's Equity Shareholder's Equity 14,094 16,110 17,780 KRW
Slide 8: Financial Ratios
Operating Margin (%) 12.9 21.3 23.7 31.5 EBITDA Margin (%) Financial Ratios 15.6 25.5 26.9 32.8 '01 '02 '03 '04 1H'05 Debt Ratio (%) 72.8 42.1 52.3 32.6 Shareholder's Equity Ratio(%) '01 '02 '03 '04 1H'05 57.9 70.4 65.7 75.4 25.7 79.6 38.7 31.8 '01 '02 '03 '04 1H05 '01 '02 '03 '04 1H05
Slide 9: Key Management Initiatives
I. 1H05 Operating Performance II. Key Management Initiatives III. Steel Industry Environment IV. 2005 Business Plan
Slide 10: Integrated Steel Plant Project in India
Integrated Steel Plant Project in India Integrated Steel Plant Project in India ? Strategic Directives ? Strategically cope with globalizing steel industry trends ? Secure raw material and penetrate Indian steel market ? Project Summary ? Integrated Steel Mill - Scale: Phase 1- 3 mn ton capacity sla
Slide 11: India: High potential growth
India : High potential growth Future Plans ? GDP growth of 6% p.a. forecasted ? Skilled labor force with low wages, abundant volume of quality iron ore (Estimated reserves: 13.5 billion tons) - Reserves in Orissa: 4 billion tons · Coal, Crom, Magnite, lime, etc. ? Long-term steel industry developmen
Slide 12: Direct investment in Australian coal mine and raw materials
Direct investment in Australian coal mine-Carborough Downs, Glennies Creek ? Stable supply of 8,4 mn tons of iron ore and coal Mines Stake Investment ( $ mn) Annual Purchase (mn tons) Australia Iron Ore POS-MAC 20% 12.2 3.0 Australia Coal Mount Throley Foxleigh Glennies Creek Carborough Downs 20% 20
Slide 13: Investment in Energy: KIECO and LNG Terminal
Korea Independent Energy Corp.(KIECO) Investment in Energy Investment in Energy Maximize synergies with LNG Terminal - Increased utilization rate^Economies of Scale Status - Capacity : 1,800MW - The largest private power generating company in Korea - Located in undersupplied metropolitan region - St
Slide 14: Refurbishment of BF#2 in Gwangyang; Domestic & Overseas Investment
Refurbishment of BF#2 in Gwangyang Shortened Refurbishment Period & Early Normalized Operation - Refurbishment Period (77 ^ 66 Days): +110K tons - Days to normalize the operation: 3 Days (NSC-Oita: 6 Days) Benefit - Inner capacity expansion ^ Productivity gains · 15% productivity gains ^ Production
Slide 15: Steel Industry Environment
I. 1H05 Operating Performance II. Strategic Initiatives III. Steel Industry Environment IV. 2005 Business Plan
Slide 16: Global steel price trends
Weakening steel prices due to high level of inventory and declined scrap prices - Spot prices (HR) : $ 700 ( Jan., '05) ^ $ 550 (June) Major mills such as Mittal and US Steel plan to cut production to improve steel prices Tight supply of BF-based products - Increasing price trends of auto steel shee
Slide 17: China steel market trends
55.6 60.6 9.3 4.4 142.8 144.5 11.2 13.4 (mn tons) < Steel Market Trends in China(an. ~ May, '05) > ? Slight uptrend pricing after the downtrend ? Net Import maintained on flat steel, led by stable demand for high-quality steel 87.2 83.9 1.9 9.0 = + (POSCO-China June, '05) Total Flats Longs China Ste
Slide 18: Growth in high value added flat products
Strong growth in high value added flat products such as auto steel sheet, electric steel sheet Automobile : Entering the recovery phase from production reduction in 1Q05 - Monthly production and sales volume increased by 7.3% yoy and 17.7% yoy, respectively - Auto sales volume increased by 24.5% yoy
Slide 19: Domestic steel industry outlook
2005 GDP Growth of 3.8% forecasted on delayed domestic consumption and slowing export growth Domestic Steel Industry GDP Growth : 4.6% ('04) ^ 3.8% ('05) 11.3 '04 '05 Shipbuilding 9.2 4.8 '04 '05 12.3 - -0.4 '04 '05 Automobile Home Appliance 1.1 '04 '05(F) Construction (POSRI '05.4) 11.9 15,143 16,9
Slide 20: Raw materials and freight trends
Nickel & Scrap Price Raw Materials & Freight Trends Freight Brazil ^ China West Australia ^ China $210 $280 $288 $14,700 $15,205 $ 16,690 $31.8 $43.5 $20.3 $ 18.1 $19.8 $8.1 Nickel Scrap Nickel - Prices at the peak due to strong demand from China and speculative demands (1H05 ASP U$15,900/ ton) - Pr
Slide 21: Automobile steel sheet
Continued tight supply of automobile steel sheets due to new cars and export ? Increased exports due to strong auto production growth in China, Southeast Asia '03 '04 '05(P) '07(F) Sales Sales 2,723 3,523 4,320 5,000 Dom. 1,453 1,986 2,377 2,600 Exp. 1,270 1,537 1,943 2,400 Stable profit forecasted
Slide 22: Shipbuilding plate
Continued demand growth as domestic shipbuilding industry grows ? Demand for high value added products forecasted to grow as the orders for quality vessels such as LNG carriers increase Continued price increases of imports from Japan POSCO Domestic Price Trend (Thou. KRW ) - 455 ('03)^600 ('04)^645
Slide 23: Electric steel sheet supply and demand
Extened supply shortage expected in Asia, mainly China and India ? Lack of GO makers will exacerbate supply shortage problem for 1~2 years ? Expand market shares with timely recognition of domestic and foreign demand/capacity expansion plans ? Tight supply market eased as orders from KEPCO declined
Slide 24: Stainless market status and forecast
Declining trends of international prices due to aggressive capacity expansion carried out in China Stainless makers' voluntary production cut seen around the globe Increasing imports and weakened export position due to appreciating KRW POSCO lowered domestic price by KRW 300K to stabilize the market
Slide 25: 2005 Business Plan
I. 1H05 Operating Performance II. Key Management Initiatives III. Steel Industry Environment IV. 2005 Business Plan
Slide 26: 2005 Business Plan
2005 Business Plan 30.2 31.3 Production (mn tons) 29.2 30.4 2004 2005(F) Sales Volume (mn tons) 2004 2005(F) ? Rolling Plan is revised on a quarterly basis to reflect new economic as well as management developments +3.7% +4.0% Sales Revenue (tn KRW) +19.3% 2004 2005(F) 23.6 19.8 2004 2005(F) Share o
Slide 27: The end of Presentation
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