THE KOREA ECONOMIC DAILY, GLOBAL EDITION

POSCO International Corp., the general trading and energy exploration unit of South Korea’s steel giant POSCO Holdings Inc., reported a 30% on-year gain in operating income in its first earnings with its energy sibling company in the first quarter of this year despite the global economic downturn.

The company announced in a regulatory filing on Thursday that its consolidated operating profit for the January-March period amounted to 279.6 billion won ($208.4 million), up 29.4% from the same period a year earlier.

The result beat the market consensus by 12%, with an operating margin up to 3.4% from 2.18% over the same period.

Sales dropped 16.2% to 8.3 trillion won but its bottom line added 17.3% to 191.3 billion won.

This was the company’s first earnings combined with that of POSCO Energy Co., which handles liquefied natural gas (LNG) and renewable energy sources in POSCO Group. The energy affiliate was officially merged under the trading sibling in January.

The profit gain in the first quarter was largely owed to a rise in gas production in Myanmar and Australia and an increase in power generation in winter, which helped the company more than offset a profit squeeze from the stronger Korean won against the US dollar to average 1,276 per dollar in the first quarter from 1,359 in the fourth quarter of 2022, as well as a cap on the wholesale energy price.

POSCO International reaped 105 billion won in operating profit from its bulked-up energy business.

Despite concerns over the global economic downturn, its steel and grain trading volume also expanded, helping its global business division earn 86.1 billion won in operating income.

Sales of its new green businesses such as eco-friendly auto parts also improved.

GREEN PUSH

The company will step up efforts to drive its growth through eco-friendly businesses this year after it declared earlier this month to transform into a green company by 2030, with a market value of 23 trillion won. Its current market capitalization is 3.8 trillion won.  

It will strive to play a bigger role in exploring a new growth driver for POSCO Group in the green materials, electric vehicle components and rechargeable battery materials, it said.  

The company announced in January it will build a palm oil refining plant in Indonesia to advance into the growing refined vegetable oil market. It has been running a palm plantation in Papua, east of Borneo, since 2017.

It also has set a target to ramp up its LNG storage capacity fourfold to 3.14 million kiloliters by 2030 from the current 730,000 kiloliters by building more LNG storage tanks at its LNG terminals in Gwangyang, South Jeolla Province.

It will also up its annual production capacity of drive motor cores, a key component of electric vehicles, to 7 million units by 2030 to secure a 10% global market share.

POSCO International shares on Thursday ended up 1.3% at 27,400 won, snapping its losing streak in the previous two sessions in a row.

Write to Hyung-Kyu Kim at khk@hankyung.com

Sookyung Seo edited this article.