SEOUL, Moody's Investors Service, a global credit ratings agency, said Monday that POSCO's robust third-quarter earnings results are "credit positive" for the South Korean steelmaker.
Last week, POSCO reported a 17 percent on-year jump in net profit in the July-September quarter to 1.058 trillion won (US$931 million) from 906.6 billion won a year earlier. The net gain was helped by increased shareholding gains from affiliates.
Operating profit jumped 36 percent on-year to 1.531 trillion won, with sales up 9.1 percent to 16.412 trillion won. POSCO revised up its sales target for 2018 to 64.8 trillion won from the 64.1 trillion won it set early on in the year. In 2017, it posted sales of 60.7 trillion won.
POSCO's solid results are "credit positive because they support the company's Baa1 rating and reflect continuing favorable operating conditions. These conditions are underpinned by solid steel prices, moderate raw material costs and mainly healthy operating performances at its key subsidiaries," Moody's analyst Sean Hwang said in a statement.
Moody's expected that recovery in some domestic end-markets, such as shipbuilding, continued capacity reduction and strict environmental measures in China will underpin the steelmaker's earnings in 2019.
Source: Yonhap News Agency