POSCO International foresees record-high profits for 2023

POSCO International Corp., a South Korean general trading and energy exploration company, is expected to post its highest-ever profits this year thanks to steady earnings growth in the energy business and rising eco-friendly materials shipments to Europe, a company official said on Sunday.

Its operating profit is forecast at around 1.2 trillion won ($909 million), surpassing last year’s 902.5 billion won. In the first nine months to September of this year, it raked in operating profits of 948.5 billion won.

The estimated earnings in 2023 are even higher than the combined pre-merger results of POSCO International and POSCO Energy, which together reached 1.17 trillion won in 2022.

The two companies were merged this year.

“Last year, both companies' profits were their highest ever,” said a POSCO official.

“We will have to wait until December results are released, but even taking into account pre-merger results, we expect to achieve our highest-ever profits in 2023.”

Since Jeong Tak took the helm ealier this year, the company has been expanding its presence in the fields of eco-friendly energy sources, EV components, rechargeable battery materials and low-emission steel raw materials. 

Its earnings are expected to grow further in the coming years. In September of this year, it secured a traction motor core supply contract worth about 900 billion won ($682 million) with Hyundai Motor Group. The supply is expected to translate into earnings from 2026.

Next year, it will start shipping reducers, a core part of an EV motor system, to unnamed car makers in the US and Europe. The contract is estimated at 300 billion won.

POSCO plans to invest 680 billion won to expand the production capacity of its traction motor cores to 10 million units by 2035.

Last month, it won a 1 trillion won ($761 million) deal to supply EV traction gears to an unidentified US automaker from next year through 2032.

"By 2035, we plan to expand our supply capacity to 350,000 tons of secondary battery materials such as graphite, lithium, nickel and copper foil, as well as cathode and anode materials,” said the company official.

The target is 10 times higher than its current capacity.

Write to Jae-Fu Kim at hu@hankyung.com
 
Yeonhee Kim edited this article.