Shown above is the head office of POSCO in southern Seoul. The South Korean steelmaker racked up record profits in the third quarter. Photo courtesy of POSCO

Quarterly profit tops 3 trillion won for the first time

South Korea’s largest steelmaker POSCO said on Oct. 14 that its third-quarter operating profit would be around 3.11 trillion won ($2.6 billion), which are more than three folds from a year ago.

The company also said that its sales would reach 20.61 trillion won during the July-September period, up 44.5 percent from 2020.

The news was disclosed a week after South Korea’s iconic company Samsung Electronics came up with its preliminary data for the third quarter.

Seoul-based Samsung racked up more than 70 trillion won ($59 billion) in the third-quarter turnover for the first time in its 52-year history.

POSCO’s operating profit is almost 20 percent higher than the market consensus, compiled by South Korean business trackers.

POSCO explained that its robust sales in the global markets boosted its profitability.

The demand for steel products shot up this year as the world recovered from the economic slump caused by the virus pandemic. But the supply has been limited as Chinese companies reduced their production. In addition, the price of iron ore has gone down dramatically this year, cutting down on steelmakers’ expenses.

Watchers expect that POSCO will be able to chalk up strong performances in the fourth quarter.

“Chinese manufacturers are not likely to increase their production through the first quarter of next year. Hence, POSCO will record strong bottom lines by then,” NH Investment & Securities analyst Byun Jong-man said.

But not all the observers are optimistic about POSCO’s future as the firm has frequently face accidents at its factories and there are potential risks related to its trade union.

More than 10 workers died over the past few years at the company’s steel mills, which prompted POSCO Chairman Choi Jung-woo to apologize at a parliamentary committee hearing this year.

In addition, concerns have risen that POSCO’s trade unions can clash with one another to weigh on the management of the company.

Hillary Lee studied literature in Seoul. Lee has big interests on various topics including IT, BT, business and finance. Lee can be reached at homin30@hanmail.net or 82-2-6956-6698.