Daewoo International Corporation. Sep. 2011

Transcription

1 Daewoo International Corporation Sep. 2011

2 Disclaimer This presentation may contain forward-looking statements. Statements that are not historical facts, including statements about our belief and expectations, are forwardlooking statements. Actual results may differ materially from those expressed or implied by these forward-looking statements

3 Contents I II III IV V VI COMPANY PROFILE POSCO FAMILY SYNERGY ANNUAL EARNINGS & FINANCIAL STURCTURE E&P ACTIVITIES MYANMAR GAS PROJECT 2Q 2011 EARNIINGS & FINANCIAL STRUCTURE Appendix. 2Q 2011 EARNIINGS & FINANCIAL STRUCTURE (Separate)

4 Part I. COMPANY PROFILE CHRONOLOGY ORGANIZATION & PERSONNEL BUSINESS STRUCTURE NEW VISION & STRATEGY SHAREHOLDING STRUCTURE

5 Chronology 2000 ~ ~ ~ Discovery of Mya gas field Credit Rating in 2009 A+ (NICE) Declaration of Member of POSCO Family (Oct) Credit Rating in 2010 AA- (Korea Ratings, in block A-3 Myanmar (Jan.2006) Credit Rating in 2005 BBB+ (Korea Ratings) Discovery of Shwe-Phyu Commerciality for Myanmar gas fields (Nov.2009) GSPA of 3 Myanmar gas fields (Dec.2008) KIS, NICE) (Sep) Share Transfer Agreement : KAMCO POSCO (Aug) FDP Approval by Myanmar Gov t (Mar) Completed workout program (Dec.2003) Spun off from Daewoo Corp. (Dec.2000) gas field in block A-1 Myanmar (Mar.2005) Sales W5t in 2004 Credit Rating in 2004 BBB- (KIS) Discovery of Shwe gas field in block A-1 Myanmar (Jan.2004) Sales W11t in 2008 (ranked 20 th in sales vol. on KOSPI) Gas reserves certification from GCA (Aug.2007) Credit Rating in 2007 A (Korea Ratings, KIS) 5

6 Organization & Personnel HQ (Seoul) INTERNATIONAL (As of Jun. 2011) DOMESTIC Management Trading Overseas Branches Overseas Subsidiaries Domestic 2 Divisions 15 Teams 5 Groups 14 Sales divisions 55 Branches & Agents 14 Trading firms (8 Sub-Branches) Busan factory Daewoo dept. store 1 TFT 62 Sales teams 12 Subsidiaries 3 Department 14 Resource projects Employees Employees Overseas Employees Employees Koreans : 250 Global Staffs : 14,474 Factory: 688 Dept. store: 239 Overseas Network : 95 Total Employees : 16,461 6

7 Business Structure 2010 Annual Revenue 15,672 bn 2010 Operating Profit 172 bn Business Group 1 - Hot Rolled Steel - Plate & Wire Rod - Cold Rolled Steel - Special Steel Business Group 2 - Machinery & Plant - Power Energy Infra - Automotive Components - Electronic Industry Sales (Wb) Energy & Resources Group - Mineral Resources - Energy Resources - E&P Operation - Agro-Resources Export 8,055 Trilateral 6,858 Domestic 758 Business Group 3 - Steel Raw Materials - Non-ferrous Metal - Metal - Commodity & Textile 7 Business Group 4 - Chemical & Oil

8 New Vision & Strategy World class Trader, Investor, Developer BIG TIGER : 6 Core Business Business Portfolio Trading Business Strategy - Trading margin upgrade and selective growth Infra development Global/Grand project Energy Resource Global Project E&P Business * Maximization of group synergy & Driving new growth - POSCO family linked business/ New market development - Participating national projects in emerging countries * E&P business performance achievement and market expansion - Establishing independent and successful E&P business model New business * Promoting new business through convergence among business portfolios 8

9 Shareholding Structure (As of Jun. 2011) Takeover : KAMCO POSCO (Sep.20, 2010, equity 68.15%) Joint Disposal Association : KAMCO, K-EXIM Bank, KDB Asset Mgt., Korea Finance Corp., Hyundai Card, Woori Bank, SGIC, Shinhan Bank, KR&C Domestic Institutions 16,582,160 (16.10%) Individuals 12,505,698 (12.15%) Foreign Investors 4,777,772 (4.64%) POSCO 68,681,566 (66.70%) ESOP 420,594 (0.41%) Total Shares Outstanding : 102,967,790 9

10 Part II. POSCO FAMILY SYNERGY POSCO S TAKEOVER GROUP-WIDE PMI CREATING GROUP SYNERGY BUSINESS RELATIONS WITH POSCO CREATE VALUE THROUGH COOPERATION 10

11 POSCO s Takeover Share Transfer Agreement (Aug. 30, 2010) KAMCO POSCO 68,681,566 Shares (68.15%) Transfer Price : W3,372 bn. (W49,100/share) 2 nd largest Company on KOSPI (end- 2010) Total Assets : W 48,190 bn (end- 2010) Net Equities : W 35,082 bn (end- 2010) Annual Sales : W 32,582 bn (FY 2010) Net Profit : W 4,203 bn (FY 2010) Number of Affiliates : 59 (end- 2010) Takeover completed on the POSCO s payment (Sep. 20, 2010) 11

12 Group wide PMI PMI tasks with participation of group companies (led by POSCO) Synergy : Daewoo Int l + POSCO Group 12 Daewoo Int l has completed implementation of PMI tasks in the 1H 2011 Overseas Sales * Daewoo Int l : Largest global network & No.1 trader in revenue among Korean trading co. * POSCO : Overseas mill construction + New biz such as new materials Expand export & trilateral trade + Early penetration in global market for new biz. Global Projects * Daewoo Int l : Strongest global network among Korean companies + PJT Organizing expertise * POSCO : Group level expertise (POSCO E&C, POSCO Chemtech, POSCO ICT, POSCO Power, POSCO P&S, POSCO M-tech, POSCO Plantec, Daewoo Eng, Sungjin Geotec., etc) Increased new orders for power/chem.eng./steel plant & LED, railway IT system, etc. Resource Exploration & Development * Daewoo Int l : Operator of giant gas project + Raw mat l trading expertise * POSCO : Raw mat l & rare metal demand + 2Mt/yr of LNG demand Opportunities for resource development PJT + Stable procurement of resource

13 Creating Group Synergy Business Focus 1. Direction : early realization of synergy within POSCO group on the basis of the PMI result 2. Initiatives : 45 Overseas PJT / 3 E&P PJT in progress (July 2011) 3. Benefits : quantitative synergy estimated at KRW 1.1tn from key cooperative fields 1. Steel 철강 Overseas 해외판매 Sales : 원거리 : increase 및신소재 advanced 수출확대 mat 추진 / long distance exports +240 bn Expand exports for POSCO steel product Market development / sales of advanced mat (Ti, Mg,etc.) Utilize Daewoo Int l global network for group as a whole In 3 Major Cooperation Fields Long-term Synergy KRW 1.1 tn +560 bn 2. Overseas Project : build cooperative system and promote joint contract Overseas sales agency of EPC company Place orders for large-scale/complex PJT & deal structuring : Urban development, package deal, large-size IPP, etc 3. Resource Development : joint investment and information sharing +270 bn Expansion of exploration & development for energy/mineral : Invest in small-sized mineral mines in Africa and Americas : Rare metal (manganese/chromium/rare-earth), uranium 13

14 Business Relations with POSCO Present joint investment(steel) with POSCO (Jun. 2011) Slovenia POSCO-ESDC Turkey POSCO-STS CR Mill Malaysia POSCO Malaysia SDN Indonesia PT International Steel Indonesia Mexico POSCO-MPC United States POSCO AAPC DWIC Sales of POSCO Steel Products Volume (in mn MT) H 2011 Sales (in tn KRW) Volume (in mn MT) Sales (in tn KRW) Volume (in mn MT) Sales (in tn KRW) HR CR STS Total

15 Create Value through Cooperation Subsidiaries to Play Key Role in Indonesia Project Construction Construct 200MW Steam Power Plant Supply at 93% of local energy provider price Refractory EPC control, quicklime facility construction By-chemical product treatment facility Indonesia Steel Mill Site (1st Stage, Total 3Mt/yr) Power Plant ㅇ Integrated Mill Steel plant EPC control - BF, Sintering, Steelmaking,etc EIC engineering & IT system integration Local office opened (Jul.'11) - Automation / IT outsourcing Operation Supply deoxidizer (9Kt/yr) Establishment of local Al deoxidizing plant ( 11.3Q) Support export & domestic sales Promote local resource development Supply refractory (113Kt/yr) Supply quick lime (269Kt/yr) Coke by-product treatment (55Kt/yr) 15

16 Part III. ANNUAL EARNINGS & FINANCIAL STRUCTURE EARNINGS RESULT (K-GAAP) SALES BREAKDOWN (K-GAAP) NON-OPERATING ITEMS (K-GAAP) FINANCIAL STRUCTURE (K-GAAP) KYOBO LIFE INSURANCE SHARES

17 Earnings Result (K-GAAP) (Wb) Years Avrg. Growth Sales 7, , , , % Operating Profit (%) % % % % 23.2% Pretax Profit (%) % % % % -4.0% Net Profit (%) % % % % 6.2% 17

18 Sales Item Sales Type Sales Breakdown (K-GAAP) (Wb) ,816 11,046 11,148 15, % 3, % 4, % % 4, % 6, % % 4, % 5, % % 6, % 8, % Export Trilateral trade Domestic 1, % 1, % 1, % 2, % 1, % 2, % 2, % 3, % 2, % 2, % 2, % 3, % 2, % 3, % 4, % 5, % 18 Steel Steel Raw Material/ Metal/ Non-ferrous Metal Chemical/ Oil Machinery & Plant/ Auto-parts/ Electronics/ Textile/ Others

19 Other Financial Cost Equity Method Non-Operating Items (K-GAAP) (Wb) Kyobo Life Insurance KOREA LNG Other Equity Method Investments Net Interest Loss on Disposal of Accounts Receivable Gain/Loss of FX Other Non- Operating Gain/Loss

20 Financial Structure (K-GAAP) Financial Structure (Wb) Current Assets , , ,198.2 Cash & ST Instruments Non-current Assets 1, , , ,592.8 Investments 1, , , ,289.5 Total Assets 2, , , ,791.0 Current Liabilities , , ,022.2 ST Debts Non-current Liab , ,184.8 LT Debts Total Liabilities 1, , , ,207.0 Equities , , ,

21 Kyobo Life Insurance Shares Kyobo Life Insurance Holdings (Jun. 2011) Kyobo Life Insurance Overview (Jun. 2011) Founded in 1958 CEO : C. J. Shin since 2000 (33.6% stake) Credit Rating : Insurance Financial Strength Rating Subordinated Bond Credit Rating A2 AAA AA+ Moody s NICE KIS Korea Ratings Daewoo s shares : 4.92 million (24% stake) Book value : W 1.1 trillion (BPS W 233,537) as of Jun.30, 2011 Condensed Financial Information Shin Family % Daewoo Int l % KAMCO 9.93 % Korea EXIM 5.85 % Others % TOTAL % Mar.2008 Mar.2009 Mar.2010 Mar.2011 Assets W46.2t W50.0t W54.1t W57.9t Equities W2.4t W2.9t W3.9t W4.6t Sales W12.3t W12.7t W12.4t W11.9t N.Profit W433.5b W291.6b W525.2b W638.9b 21

22 Part IV. E&P ACTIVITIES E&P PORTFOLIO GEOGRAPHICAL SPREAD E&P ACTIVITIES (OIL & GAS) E&P ACTIVITIES (MINERAL RESOURCES) AMBATOVY NICKEL PROJECT, MADAGASCAR NARRABRI COAL PROJECT, AUSTRALIA ONGOING E&P PROJECTS AGRO-RESOURCES DEVELOPMENT

23 E&P Portfolio - Geographical Spread (Aug 2011) CANADA Kiggavik (uranium) OMAN KOLNG CAMEROON Mayo Darle (tin) MYANMAR AD-7 (Operator) MADAGASCAR Ambatovy (nickel) MYANMAR A-1 (gas) (Operator) UZBEKISTAN 35 (Operator) UZBEKISTAN 36 (Operator) MYANMAR A-3 (gas) (Operator) AUSTRALIA White Cliff (nickel) KOREA Block 6-1, Southern area (Operator) VIETNAM 11-2 (gas) AUSTRALIA Marree (uranium) AUSTRALIA Narrabri (coal) PERU 8 (oil) BOLIVIA Corocoro (copper) 9 Oil & Gas Projects 7 Mineral Resource Projects 23

24 EXPLORATION ENERGY RESOURCES DEVELOPMENT PRODUCTION E&P Activities (Oil & Gas) Project Equity Reserve History & Status Remarks Peru block 8 (oil field) 11.7% 40 MM bbl : Participation (operator : Pluspetrol) - Production: 13,000 bbl/day (crude oil) - Earnings: U$ 10.2mn in 2010 U$ 9.6mn in 2009 U$ 15.5mn in 2008 U$ 10.0mn in 2007 Oman KOLNG (LNG plant) 20% (1% of OLNG) 14 TCF : Participation (operator : Shell) : Production (dividend since 2002) - Annual capacity : 5.6mmMT - Earnings: U$ 13.4mn in 2010 U$ 12.9mn in 2009 U$ 21.1mn in 2008 U$ 12.0mn in 2007 Vietnam offshore block 11-2 (gas field) 4.9% 0.9 TCF 23 MM bbl : Participation (operator : KNOC) - Dec 2006: commercial gas production - Production : 154 mmscf/day (Gas) 3,800 bbl/day (Condensate) - Earnings: U$ 4.2mn in 2010 U$ 2.2mn in 2009 U$ 5.1mn in 2008 U$ 3.4mn in Myanmar offshore block A-1 (gas field) Myanmar offshore block A-3 (gas field) Myanmar offshore block AD-7 Uzbekistan block 35 & 36 Korea offshore block 6-1 (Southern area) 51% (*Operator) 51% (*Operator) 100% (*Operator) 100% (*Operator) 70% (*Operator) 3.3~ 5.6 TCF 1.3~ 2.2 TCF n/a n/a n/a - Jan 2004: Discovery of Shwe gas field - Mar 2005: Discovery of Shwe-Phyu gas field - Aug 2006: Certification of reserves in Shwe & Shwe-Phyu gas fields (from GCA) - Jan 2006: Discovery of Mya gas field - Aug 2007: Certification of reserves in Mya gas field (from GCA) - Feb 2007: PSC ~2008: 2D & 3D seismic survey - Feb 2008: Exploration Agreement - Satellite Image Analysis, Gravity & Magnetic Survey in D seismic survey in Aug 2011: Acquisition of exploration permit - Parties: DWIC 70%, KNOC 30% Note) TCF : Trillion Cubic Feet, KNOC : Korea National Oil Corporation, GCA : Gaffney, Cline & Associates GSPA : Gas Sales & Purchase Agreement, FDP : Field Development Plan, PSC : Production Sharing Contract - GSPA(CNUOC) in Dec Declaration of Commerciality in Nov EPCIC Contract in Feb FDP Approval in Mar Establishment of Gas pipeline company in Jun Initial Gas Sales in May 2013

25 EXPLORATION MINERAL RESOURCES DEVELOPMENT E&P Activities (Mineral Resources) Project Equity Reserve Remarks Madagascar Ambatovy (nickel) 4.0% 125 MM tons : Participation - Operator: Sherritt (Canadian) - Parties: Sherritt 40%, Sumitomo 27.5%, KC 27.5% (KORES 17.5%, others) - Production in 2011 (Production period : 27 years) - Annual Capacity: Nickel 60,000 MT, Cobalt 5,600 MT Australia Narrabri (coal) 5.0% 230 MM tons - Aug 2009: Participation - Operator: Whitehaven (Australian) - Parties: Whitehaven 70%, KORES 2.5%, others - Annual Capacity: 6 mm MT (Partial production from Jun. 2010) Canada Kiggavik (uranium) 1.7% 104 MM lbs : Participation - Parties: AREVA (Canadian) 64.8%, JCU Canada 33.5% : Completion of pre-feasibility study : Reorganize project team ~2007: Conduct viability study ~2011: Environmental assessment study, F/S Australia White Cliff (nickel) 25% n/a : Participation - Parties: White Cliff Nickel 50% (Australian) KC 50% (KORES 25%, DWIC 25%) - Exploration in progress Australia Marree (uranium) 12.5% n/a : Participation - Parties: Scimitar 50% (Australian) KC 50% (KORES 20%, others) - Exploration in progress Bolivia Corocoro (copper) 5% n/a : Participation - Parties: COMIBOL 55% (Bolivian) KC 45% (KORES 23%, others) - Exploration in progress Cameroon Mayo Darle (tin) 100% n/a - July 2011: Acquisition of mining rights - Party: DWIC 100% - Exploration in progress 25

26 Ambatovy Nickel Project, Madagascar MADAGASCAR AMBATOVY (NICKEL) Participation in 2006 / Construction Completion & SOP in 2011 Location : Madagascar Morimanga(Mine), Tomasina(Plant) Acreage : km 2 Reserve : 125 MM tons Equity : Sherritt 40%, Sumitomo 27.5%, SNC-Lavalin 5% Daewoo International 4%, KORES 17.5%, Samsung CNT 3%, HHI 1.5%, STX 1%, Hyundai Corp. 0.5% 26

27 Narrabri Coal Project, Australia AUSTRALIA NARRABRI (COAL) Participation in 2009 / Partial production from Jun Location : Gunnedah Basin, NSW Acreage : 113 km 2 Reserve : 432 MM tons Equity : Whitehaven 70%, Yudean 7.5%, J-Power 7.5%, EDF 7.5% Daewoo International 5%, KORES 2.5% 27

28 Ongoing E&P PJT Myanmar Gas PJT Investment Approval by Indian Gov. t (Feb.18, 2010) EPCIC Contract with HHI (Feb. 23, 2010) FDP Approval by Myanmar Gov t (Mar.5, 2010) Company establishment for Onshore Pipeline business (Jun.25, 2010) (Equity : CNPC 50.9%, Daewoo Int l 25.04%, Other partners 24.06%) Decision on investments of W 84.5 bn in South-East Asia Gas Pipeline Company Ltd Total capital : W bn (Oct.14, 2010) Production well drilling operations, off-shore plant & pipelines construction in progress (2011) New Investment and Exploration Ambatovy Nickel PJT : Additional investment of 1.25% stake (Daewoo s stake became 4%) (Apr. 2010) Equity Investment : U$ 33.7 mn (1.25%), Guaranty added : U$ 71.6 mn Ongoing exploration in 2011 : Uzbekistan block 35/36, Australia nickel, Bolivia copper, etc. New investments PJT (Jul.2011) : Cameroon tin contract, Ethiopia tantalum MOU Production from New Mines Narrabri Coal, Australia : Partial production from strip mines in 2H 2010 Initial production in 1Q.2012(E) (Annual Capacity : Coal 6mm MT) Ambatovy Nickel, Madagascar : Completion of plant construction & production in 4Q.2011(E) (Annual Capacity : Nickel 60,000 MT, Cobalt 5,600 MT) 28

29 Agro-Resources Development Oil Palm Plantation Location : Merauke, Papua, Indonesia Acreage : 36,400 Ha (Real area of plantation: 30,000 Ha) Period : 35 years (Additional extension of 60 years(1 st 25 years, 2 nd 35 years) is capable) Equity : Daewoo International 85%, Others 15% (Contracts completed in Aug. 2011) Expected Investment : U$ 50 mn (Installment payment from 2011 to 2018) Forest Resources Development Location: Tomsk, Russia Acreage : 209,446 Ha Period : 49 years (Additional extension is capable) Equity : Daewoo International 50%, Others 50% (Contracts completed in Sep. 2011) Expected Investment : U$ 3 mn Location : Kompong Thom, Cambodia Acreage : 25,600 Ha (Real area of plantation: 24,250 Ha) Period : 70 years (Additional extension of 30 years is capable) Equity : Daewoo International 30%, Others 70% (Contracts in process) Expected Investment : U$ 8 mn 29 Rice/Soybean Plantation

30 Part V. MYANMAR GAS PROJECT OFFSHORE BLOCKS GAS FIELDS DEVELOPMENT CONCEPT OVERVIEW MILESTONE PLANS GAS DEVELOPMENT PLAN GAS SALES & PURCHASE AGREEMENT (GSPA)

31 Offshore Blocks 1. Project: Myanmar block A-1 (since Aug 2000) Acreage: 2,119 km 2 Contract Type: Production sharing Ownership: Daewoo International 51% (Operator) ONGC Videsh 17%, MOGE 15%, KOGAS 8.5%, GAIL 8.5% 2. Project: Myanmar block A-3 (since Feb 2004) Acreage: 3,441 km 2 Contract Type: Production sharing Ownership: Daewoo International 51% (Operator) ONGC Videsh 17%, MOGE 15%, KOGAS 8.5%, GAIL 8.5% 3. Project: Myanmar block AD-7 (since Feb 2007) Acreage: 1,684 km 2 Contract Type: Production sharing Ownership: Daewoo International 100% (Operator) 31

32 Gas Fields Certification Results Block Gas field Recoverable Resources (TCF) Shwe 2.87 ~ 4.67 A-1 Shwe Phyu 0.38 ~0.91 A-3 Mya 1.28 ~ 2.16 Total 4.53 ~ 7.74 Certified by GCA (Gaffney, Cline & Associates) 32

33 Development Concept - Overview Chinese Border 33

34 Milestone Plans Gas Sales MOU Jun.2008 GSPA Dec.2008 Declaration of Commerciality / EPCIC contractor Selection Nov.2009 Gov. t Approval of FDP / EPCIC Contract Feb.2010 EPCIC Period 2009~2013 Initial Gas Supply May 2013 GSPA : Gas Sales & Purchase Agreement, EPCIC : Engineering, Procurement, Construction, Installation & Commissioning FDP : Field Development Plan Detailed Engineering Procurement Construction & Fabrication Installation & Hook-up Gas Supply 34

35 Gas Development Plan Investment Overview Total Investment for Daewoo International : U$ 1.7 bn Total Investment for the development Consortium : U$ 3.4 bn Investment Period : 2009 ~ 2014 (* Gas production in May 2013(E)) Upstream and Offshore Pipeline Offshore Production Platform : 640mmscf/day (Additional extension of 320mmscf/day is capable) Daily supply during the Plateau Period : 500mmscf/day Offshore Pipeline : 32 X 110km EPCIC Contractor : Hyundai Heavy Industries Onshore Pipeline Onshore Pipeline Operation : CNPC 50.9%, Daewoo Consortium 49.1% (* 5 companies) Onshore Pipeline : 40 X 790km 35

36 Gas Sales & Purchase Agreement (GSPA) Signing Date 24th December 2008 Contract Parties Seller : Daewoo International Corp./ONGC/MOGE/GAIL/KOGAS Buyer : China National United Oil Corporation * Guaranteed by China National Petroleum Corporation Main Contents The sales of natural gas produced in Blocks A-1/A-3 to CNUOC through pipeline for about 30 years Daily supply during the Plateau Period : 500 mmscf Gas sales price : floating with oil price & price index 36

37 Part VI. 2Q 2011 EARNIINGS & FINANCIAL STRUCTURE CONSOLIDATED OPERATING PERFORMANCE (K-IFRS) CONSOLIDATED EARNINGS RESULT (K-IFRS) CONSOLIDATED FINANCIAL STRUCTURE (K-IFRS)

38 11.2Q Consolidated Operating Performance 4,322.2 (Wb) +13% +7% 4, ,575.6 Sales 2Q Sales: W 4,889.5 bn (YoY 13%, QoQ 7% ) Increase in exports & trilateral trade Strong sales performance in steel, steel raw material, metal, non-ferrous metal, etc. 10.2Q 11.1Q 11.2Q Operating Profit % % 2Q Operating Profit: W 49.9 bn (YoY 5%, QoQ 30% ) Unfavorable market condition due to global economic instability Decrease in few trade sectors operating profit and valuation loss of inventory due to volatility in raw material prices Q 11.1Q 11.2Q % 1778% Q 11.1Q 11.2Q Pretax Profit 2Q Pretax profit: W bn (YoY 231%, QoQ 1778% ) Although there was increased valuation loss of CB ( 11.1Q 7.9 bn 11.2Q 19.8 bn), pretax profit sharply increased due to decrease in commodity futures loss and equity method gain ( 11.1Q 0.02 bn 11.2Q 64.8 bn) 11.2Q equity method gain : Kyobo life 56.7 bn, KOLNG 5.6 bn, etc.)

39 Consolidated Earnings Result (Wb) H Q 1Q Q YoY QoQ Sales 7, , , , , % 7 % Operating Profit % 30% OP Margin 1.2% 1.3% 1.1% 1.5% 1.0% Pretax Profit % 1778% PP Margin 0.9% 1.2% 0.7% 0.1% 2.2% Net Profit % 3157% NP Margin 0.8% 1.0% 0.7% 0.1% 1.8% 39

40 Consolidated Financial Structure Current Assets Cash equivalents & ST financial instruments Trade receivables Inventories Non-Current Assets Other non-current financial assets Investments in associates Natural resources exploration investments PPE & Investment property Intangible assets(resource development, etc.) K-GAAP 2, , , , K-IFRS 4, , , , Q K-IFRS 4, , , , , Q K-IFRS (Wb) 5, , , , , Total Assets 5, , , ,132.0 Current Liabilities Trade payables Short-term borrowings (Trade loan, etc.) Corporate bonds 2, , , , , , , , , , Non-Current Liabilities Long-term borrowings Corporate bonds 1, , , , Total Liabilities 4, , , ,482.8 Equities 1, , , ,

41 APPENDIX. 2Q 2011 EARNIINGS & FINANCIAL STRUCTURE (K-IFRS Separate) Sales Breakdown (K-IFRS Separate) Earnings Result (K-IFRS Separate) Quarterly Earnings Result (K-IFRS Separate) Financial Structure (K-IFRS Separate) 41

42 Sales Breakdown (K-IFRS Separate) (Wb) Q Q Q Q 3, , , , ,625.7 Sales Type Export Trilateral trade Domestic % 1, % % 1, % % 8, % % 2, % % 2, % 1, % 2, % 6, % 1, % 2, % Sales Item Steel Steel Raw Material / Metal / Non-ferrous Metal Chemical / Oil Machinery / Plant / Auto-parts / Commodity / Textile / Electronics / etc % % % 1, % % % 1, % 1, % 2, % 3, % 4, % 5, % % % 1, % 1, % % 1, % % 1, % 42

43 Earnings Result (K-IFRS Separate) (Wb) H Q 1Q Q YoY QoQ Sales 7, , , , , % 4 % Operating Profit % 38 % OP Margin 1.31% 1.14% 1.16% 1.43% 0.85% Pretax Profit Turned a profit 295 % PP Margin 0.05% 0.77% 0.33% 0.32% 1.21% Net Profit Turned a profit 262 % NP Margin 0.12% 0.66% 0.20% 0.29 % 1.01% 43

44 Quarterly Earnings Result (K-IFRS Separate) (Wb) Q 2Q 3Q 4Q Total 1Q 2Q Sales 3, , , , , , ,625.7 Operating Profit OP Margin 1.50% 1.16% 0.75% 0.72% 1.02% 1.43% 0.85% Pretax Profit PP Margin 0.50% 0.33% 2.57% 0.90% 0.36% 0.32% 1.21% Net Profit NP Margin 0.50% 0.20% 2.65% 2.30% 0.01% 0.29 % 1.01% 44

45 Financial Structure (K-IFRS Separate) (Wb) Q Q Current Assets Cash equivalents & ST financial instruments Trade receivables Inventories KGAAP 2, KIFRS 3, , KIFRS 4, , KIFRS 4, , Non-Current Assets Other non-current financial assets Investments in associates Natural resources exploration investments PPE & Investment property Intangible assets(resource development, etc.) 2, , , , , , , , Total Assets 4, , , ,303.9 Current Liabilities Trade payables Short-term borrowings (Trade loan, etc.) Corporate bonds 2, , , , , , , , , Non-Current Liabilities Long-term borrowings Corporate bonds 1, , , , Total Liabilities 3, , , ,877.1 Equities 1, , , ,

46 Thank you!