Analyst Note| Ken Foong, CFA |
Posco’s 2020 full-year results were slightly better than management guidance but in line with our expectation. Group revenue declined by 10.2% year over year to KRW 57.8 trillion, higher than the guidance by KRW 2.4 trillion, while EBIT fell by 37.9% year over year to KRW 2.4 trillion. The lower results were mainly driven by weaker earnings at its parent company (predominantly steel business), where EBIT fell by 56.1% year over year to KRW 1.1 trillion due to sluggish steel demand and lower steel prices amid COVID-19. Production and shipment of steel products dropped by 4.1% and 4.8% year over year, respectively, due to low utilization rate and the revamp of blast furnace number 3 at Gwangyang Works.