Posco earned near $2 billion in milestone operating income, fueled by a jump in steel demand and prices as well as materials for secondary batteries.

The South Korean steel giant reported on Thursday that it reaped 2.2 trillion won ($1.9 billion) in operating income on a consolidated basis for the second quarter ended June 30, up 41.94 percent from the previous quarter and a whopping 1,194.12 percent from a year earlier.

The result beat the consensus estimate by 9.5 percent. It is the company’s best-ever result since it started publishing earnings in a regulatory filing in 2006, and the first time to earn more than 2 trillion won from operations since its adoption of the International Financial Reporting Standards (IFRS) in 2010.

Net income came to 1.8 trillion won, up 58.77 percent on quarter and 1,710.0 percent on year. Sales totaled 18.29 trillion won, gaining 13.81 percent from the first quarter and 33.31 percent from a year earlier.

Responding to the strong result, Posco shares gained 4.7 percent to close Thursday at 346,000 won.

In line with the record earnings, the company revised up its sales forecast for the full 2021 to 66.4 trillion won from April’s projection of 63.2 trillion won.

The company’s strong performance was mainly led by its mainstay steel business that saw a surge in sales thanks to the recovery in global steel demand in line with eased Covid-19 fears, which resulted in higher steel prices.

The company’s overseas units also fared well, and new growth engines showed solid growth.

Posco Chemical, a secondary battery material manufacturing unit, generated an all-time high operating income of 35.6 billion won for the second quarter over sales of 480 billion won. It also reversed to a net profit of 39.9 billion won.

The record earnings were owed much to the cathode materials business with demand grown rapidly from electric vehicle battery makers. The division delivered 167.7 billion won in sales, up 8.4 percent on quarter and more than tripled from a year earlier.

Posco Chemical made 44 percent of its sales from the energy materials business, comprised of cathode and anode materials.

On Thursday, its shares finished flat at 154,500 won.

By Cho Jeehyun

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