POSCO International’s Q3 Operating Profit Projected at KRW 395.8 Billion, Up 25% Year on Year — Hana Securities

[Financial News] Rising international oil prices and increased gas production are expected to improve POSCO International’s results in the third quarter of this year. Hana Securities projected that third-quarter operating profit would rise more than 25% year on year and meet the market consensus. It maintained its target price of KRW 105,000 and its “Buy” rating.
On the 1st, Hana Securities forecast POSCO International’s third-quarter revenue at KRW 8.261 trillion and operating profit at KRW 395.8 billion. Revenue was estimated to increase 0.2% year on year, while operating profit was expected to rise 25.3%.
Compared with the previous quarter, revenue is expected to decline 14.2% and operating profit 7.7%. Hana Securities analyzed that rising international oil prices were having a positive effect on the energy segment, partially offsetting the negative impact of external factors such as exchange rates.
By business segment, third-quarter operating profit from the energy segment was projected at KRW 144.4 billion, up 26.4% year on year. At the Myanmar gas field, the earlier rise in oil prices is expected to be reflected in selling prices, while the power generation business is likely to benefit from higher wholesale electricity prices (SMP). For Australia’s Senex Energy, production growth is expected to be concentrated in the second half of this year, creating operating leverage through increased volumes. Steel, however, was expected to see lower margins due to the weaker euro against the U.S. dollar. The materials and bio businesses and the trading subsidiaries were also projected to show a similar trend.
Operating profit from the global segment was forecast at KRW 253.8 billion, up 28.6% from the same period last year and 12.1% from the previous quarter. The palm business was expected to benefit from the inclusion of a newly acquired subsidiary’s results in the consolidated financial statements and from seasonal peak demand. The overall operating margin was estimated to rise by 1.0 percentage point, from 3.8% in the third quarter of last year to 4.8% this year.
Over the medium to long term, Hana Securities expected the expansion of energy assets to continue. Investment in Phase 4 of the Myanmar gas field project is underway, and production growth at Senex was projected to continue beyond 2027.
Following the recent addition of North American gas field assets to its portfolio, POSCO International was expected to make further investments in upstream assets in North America and Southeast Asia.
Hana Securities estimated POSCO International’s full-year operating profit at KRW 1.4754 trillion, up 26.6% from the previous year. Net income attributable to controlling shareholders was expected to reach KRW 957.7 billion, an increase of 56.0%. The company’s projected price-to-earnings ratio (PER) for this year was 10.5 times, while its price-to-book ratio (PBR) was estimated at 1.4 times.

[email protected] Kim Mi-hee Reporter