S.Korean trading companies boost profits by diversifying businesses

POSCO International Corp. joined the "1 trillion won ($751 million) profit club" for the first time in 2023, powered by a near doubling of its energy sector operating profit and aggressive diversification efforts.

The trading giant's energy business, encompassing gas, solar and wind power, saw operating profit soar to an estimated 600 billion won last year, compared with 303 billion won in 2022, industry sources said.

This surge, fueled by expanded production, storage, and power generation capabilities from the 2023 merger with POSCO Energy, significantly bolstered POSCO International's overall performance.

POSCO International's operating profit climbed 28.8% compared to the previous year, reaching 1.16 trillion won in 2023 and marking a new milestone for the company.

The South Korean trading sector is witnessing a broader trend of successful diversification, with other big players like Samsung C&T Corp. and SK Networks Co. also reaping the rewards of venturing beyond traditional trading activities.

Samsung C&T's operating profit is estimated to have risen 16.3% annually, reaching 2.94 trillion won in 2023, with strong performances across diversified sectors such as construction, fashion and biotechnology.

SK Networks' operating profit experienced a 42.5% annual increase, amounting to 219.7 billion won, fueled by robust growth in car rentals, mobile phone sales and its flagship Walkerhill Hotel.

Write to Sang Hoon Sung at uphoon@hankyung.com