KwangRae Park

KwangRae Park of Shinhan Investment Securities asked for the steel business outlook for the second half, specifically regarding sales volume and profit margins, and inquired about potential short-term earnings volatility from the non-core asset restructuring.

Answer

An executive from the Steel business projected a 1 million ton sales increase in H2, with slightly improved mill margins as raw material cost declines are expected to outpace steel price drops. Regarding restructuring, another executive acknowledged the possibility of temporary losses but stated they would be spread over several years and covered by cash generation and improved earnings from the remaining portfolio, thus minimizing short-term impact.

Asked for the sales and profit outlook for the steel business in the second half of the year and questioned whether the restructuring of noncore assets could lead to short-term losses and volatility.

Answer

POSCO projects higher steel sales volume in H2 due to facility normalization, which should improve margins despite falling prices in Q3, as raw material costs are expected to fall further. They acknowledged that restructuring noncore assets could cause temporary losses, but these will be spread over several years and are expected to be covered by cash generation and improved consolidated earnings, minimizing the impact on any single year.