POSCO Group logged its first-ever net loss of 96 billion won ($79.4 million) in 2015, due to weak global demand for steel products and adverse currency movements, group chairman Kwon Oh-joon said in Seoul on Thursday.
POSCO chairman Kwon Oh-joon attends an investors‘ forum in Seoul on Thursday. Yonhap
Based on the consolidated financial statement, the operating profits of the nation’s top steelmaker fell 25 percent to 2.41 trillion won last year from 3.2 trillion won in 2014 mainly due to the prolonged slump in its core steel business.
POSCO also witnessed its business shrink, with sales falling 10.6 percent to 58.19 trillion won in 2015.
However, not all indicators looked bad. The margin of the group’s core steel business rose 0.7 percent to 8.7 percent last year from a year ago thanks to an increase in sales of premium steel products. Net profit of the steel business rose 15.7 percent to 1.32 trillion won, driven by the belt-tightening cost cutting measures.
In addition, the Korean steel giant improved its financial health. The debt-to-equity ratio of the group fell to 78.4 percent last year, the lowest level since 2010.
The group chief highlighted the firm’s restructuring efforts in front of investors. Based on the firm’s “POSCO Innovation 2.0” vision announced last July, the chairman said the company scrapped about 35 businesses and offices at home and abroad, including the Odisha steel mill project in India.
“We will restructure an additional 35 businesses and offices by the end of this year as part of our effort to focus on its core competency,” Kwon said.
Regarding the business outlook for 2016, the group chief projected a pickup in global demand for steel products in such sectors as automobiles, shipbuilding and construction.
“POSCO will put a stress on its world-best steel products for profitability, with the goal of lifting the ratio of these premium product sales to the total to 48.5 percent,” he said.
The company said it would also drive exports of its own steel technologies and engineering to emerging markets, including China, India and Iran, this year, to secure a new income source.
Shares of POSCO rose 1.16 percent to 174,500 won, on hopes for the restructuring of the Chinese steel industry and the outlook for an improvement in global steel demand this year.
By Seo Jee-yeon (
jyseo@heraldcorp.com)
