POSCO Int’l logs highest revenue for group affiliate in 2022

The trading arm posted $29 bn in revenue and $692 mn in operating profit, thanks to rising raw material costs and the strong dollar

POSCO International headquarters in Songdo International Business District, Incheon, South Korea (Courtesy of POSCO)

Seo-Woo Jang 1

Mar 13, 2023 (Gmt+09:00) suwu@hankyung.com

Earnings

POSCO International Corp., the general trading and energy exploration unit of South Korea’s steel giant POSCO Holdings Inc., logged the highest revenue for an affiliate of the group last year.

The trading unit achieved 38 trillion won ($29.2 billion) in revenue and 902.5 billion won in operating profit last year, according to its regulatory filing last week.

The company posted 21.5 trillion won and 33.9 trillion won revenues in 2020 and 2021, respectively. It enjoyed a rise in sales last year, taking advantage of the strong dollar against the Korean won and increased costs in raw materials that it globally trades. Some 95.8% of its 2022 revenue came from the trading business.

POSCO International is expected to enhance profitability with POSCO Energy Co., the energy exploration and production affiliate it merged with in January this year.

In a bid to reinforce its energy business, the trading company won the rights to explore gas fields off Indonesia in a consortium with Indonesia’s PT Pertamina Hulu Energi (PHE) earlier this year. POSCO International imports liquefied natural gas, while POSCO Energy operates a liquefied natural gas (LNG) terminal, a facility for regasifying the liquefied fuel, in Gwangyang, 300 kilometers south of Seoul.

Meanwhile, POSCO, the holding firm’s top subsidiary and steel production unit, also posted its yearly earnings last week. It is the steel manufacturer’s first earnings announcement since it was split off from POSCO Group in March last year, when the group launched the holding company.

The steel production arm achieved 35.8 trillion won in revenue and 1.6 trillion won in operating profit last year. Its earnings were hit by many challenges including the suspension of its Pohang plant amid typhoon Hinnamnor and the ensuing flood, which slashed its annual operating profits by 1.3 trillion won. Sluggish global steel demand and the truckers' strike also impacted its sales.

Write to Seo-Woo Jang at suwu@hankyung.com

Jihyun Kim edited this article.