POSCO International's Ambitious Plan to Enhance Shareholder Value and Growth Strategy
On December 23, 2024, POSCO International Corporation announced its new 'Corporate and Shareholder Value-Up Plan', a strategic initiative aiming to enhance both corporate and shareholder value significantly. This ambitious plan involves raising the shareholder return ratio from the existing 25% to an impressive 50% starting in 2025. This is a major shift for the company, which had previously established a mid-term shareholder-friendly policy earlier this year. By adopting interim dividends, POSCO International aspires to position itself as South Korea's foremost shareholder-friendly corporation.
The core of this new strategy involves setting an aggressive target for an average annual growth rate of at least 8% in pre-tax income alongside a goal for Return on Invested Capital (ROIC) that surpasses the Weighted Average Cost of Capital (WACC), currently standing at 8.0%. These targets are designed to enhance corporate value while maintaining stable profitability and operational efficiency.
In addition to these financial goals, POSCO International is committed to strengthening its market position by expanding its activities in the energy and agriculture sectors. The company plans to maximize profitability in its steel and mobility businesses through synergies created in collaboration with the larger POSCO Group, ensuring that risks are effectively diversified across its key business sectors.
Since its integration into the POSCO Group in 2010, POSCO International has been on a transformative journey, restructuring its core business portfolios, and achieving remarkable financial milestones, including surpassing 1 trillion KRW in operating profit for the first time last year. This progress has been enabled through large-scale mergers and acquisitions as well as strategic investments, laying the groundwork for continued sustainable growth and profitability in the future.
The new plan also emphasizes the importance of transparent communication with shareholders, aligning with the government's broader value-up program. POSCO International's C-level management team is set to improve investor relations (IR) activities and implement innovative strategies, ensuring that stakeholders are kept informed about the company’s mid-to-long-term strategic direction.
A company spokesperson remarked: “Through this comprehensive plan aimed at enhancing both shareholder and corporate values, we intend to establish POSCO International as a leader in shareholder-friendly practices in South Korea. We will persist in advancing the growth of our core businesses while cultivating trust among our stakeholders.”
As POSCO International charts its course forward with this new plan, it signifies an exciting time for both the company and its investors, enhancing shareholder value while promoting sustainable and profitable business practices.
The core of this new strategy involves setting an aggressive target for an average annual growth rate of at least 8% in pre-tax income alongside a goal for Return on Invested Capital (ROIC) that surpasses the Weighted Average Cost of Capital (WACC), currently standing at 8.0%. These targets are designed to enhance corporate value while maintaining stable profitability and operational efficiency.
In addition to these financial goals, POSCO International is committed to strengthening its market position by expanding its activities in the energy and agriculture sectors. The company plans to maximize profitability in its steel and mobility businesses through synergies created in collaboration with the larger POSCO Group, ensuring that risks are effectively diversified across its key business sectors.
Since its integration into the POSCO Group in 2010, POSCO International has been on a transformative journey, restructuring its core business portfolios, and achieving remarkable financial milestones, including surpassing 1 trillion KRW in operating profit for the first time last year. This progress has been enabled through large-scale mergers and acquisitions as well as strategic investments, laying the groundwork for continued sustainable growth and profitability in the future.
The new plan also emphasizes the importance of transparent communication with shareholders, aligning with the government's broader value-up program. POSCO International's C-level management team is set to improve investor relations (IR) activities and implement innovative strategies, ensuring that stakeholders are kept informed about the company’s mid-to-long-term strategic direction.
A company spokesperson remarked: “Through this comprehensive plan aimed at enhancing both shareholder and corporate values, we intend to establish POSCO International as a leader in shareholder-friendly practices in South Korea. We will persist in advancing the growth of our core businesses while cultivating trust among our stakeholders.”
As POSCO International charts its course forward with this new plan, it signifies an exciting time for both the company and its investors, enhancing shareholder value while promoting sustainable and profitable business practices.
Topics Financial Services & Investing）
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