[Edaily Reporter kyoungeun kim ] POSCO INTERNATIONAL(047050)is expected to post third-quarter earnings in line with market expectations, driven by rising international oil prices. Analysts predict the company will continue to set new quarterly earnings records thanks to expanded production at its energy assets and the acquisition of a new palm oil subsidiary.

In a report released on the 1st, Yoo Jae-seon, an analyst at Hana Securities, estimated POSCO INTERNATIONAL’s third-quarter operating profit at 395.8 billion won, a 25.3% increase from the same period last year. He projected revenue to rise 0.2% to 8.261 trillion won. He maintained a “Buy” rating and a target price of 105,000 won. The stock closed at 56,900 won the previous day.

Analyst Yoo stated, “Rising international oil prices are having a positive impact on the energy sector’s performance, helping the company overcome the negative effects of external variables such as exchange rates,” adding, “Considering the acquisition of a new palm oil subsidiary and the expansion of energy asset production, the company is expected to continue setting new quarterly earnings records.”

The energy sector is expected to drive growth. In the exploration and production (E&P) segment, past oil price strength is expected to be fully reflected in the selling price of the Myanmar gas field, while the power generation business is projected to see revenue growth due to rising system marginal prices (SMPs). Senex, the Australian subsidiary, is expected to benefit from operating leverage as production increases are concentrated in the second half of the year. The palm oil business is also expected to see a significant increase in earnings due to the consolidation of the newly acquired subsidiary and the peak season effect.

Conversely, the materials segment is expected to perform somewhat sluggishly. Margins in the steel sector are projected to decline due to the weakness of the euro against the dollar, and the materials, biotech, and trading subsidiaries are expected to follow a similar trend.

Additional investments in energy assets were also cited as a positive factor. Analyst Yoo noted, “North American natural gas field assets, which are free from geopolitical risks, have been added to the portfolio,” adding, “Following the acquisition of shale gas fields, further upstream asset investments are expected in North America and Southeast Asia; in particular, securing operating rights for Southeast Asian assets will further strengthen our liquefied natural gas (LNG) trading capabilities.”

He added, “Now is the time to prepare for the risk of rising energy commodity prices during the winter.” The price-to-earnings ratio (P/E) for this year is 10.5 times, and the price-to-book ratio (P/B) is 1.4 times.