On July 22, POSCO (PKX) reported its second quarter 2011 financial results. Net income jumped 22.5% sequentially to KRW 1,372 billion or KRW 15,725 per share (US$3.63 per ADR). Compared with the year-ago quarter net income increased 22.6%.
Revenue
POSCO reported consolidated revenue of KRW 17,047 billion (US$15.8 billion) in the second quarter, an increase of 58.0% year over year and 4.9% sequentially. The year-over-year sales growth was driven by solid finished product sales across all product categories.
Crude steel production jumped 11.0% year over year and 3.8% sequentially to approximately 9.3 million tons. Export ratio in the quarter was 33.6%.
Margins
As a percentage of revenue, consolidated cost of goods sold declined to 84.3% compared with 86.6% in the previous quarter but increased in comparison with 76.6% in the year-ago quarter. Operating margin decreased from 18.2% in the second quarter 2010 to 10.2% in the reported quarter and increased from 8.3% in the previous quarter.
Cost savings in the first half of the year 2011 was approximately KRW 695.3 billion.
Balance Sheet
Exiting the second quarter, POSCO had cash and cash equivalents of approximately KRW 7,973 billion (US$ 7.4billion), registering a sequential increase of 15.1%. Long-term liabilities of the company grew 8.4% sequentially to KRW 15,110 billion (US$14.0 billion).
Outlook
For fiscal year 2011, management expects consolidated revenue to be approximately KRW 66.4 trillion.
Finished product sales are expected to be roughly 34.7 million tons; crude steel production would be roughly 37.1 million tons while consolidated investments are likely to be approximately KRW 9.7 trillion. The company targets to save costs amounting to KRW 1 trillion.
POSCO is the world’s third largest steelmaker on the basis of output. The company primarily manufactures steel for the shipping and construction industries and operates through its two steel production facilities, the Pohang Works and the Gwangyang Works.
POSCO-ADR (PKX): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment