POSCO International Gains as Commodity Prices Surge; Dividend Hopes Rise [Click e Stock]

Third-quarter operating profit reaches 400.7 billion won, beating expectations
Expanding investments in gas assets and LNG terminals
6.3% dividend yield... "A stable alternative"

Surging gas prices are expected to fuel stronger earnings at POSCO International. Although utilization rates at its gas-fired power plants were weak, the company was able to post strong results as gas prices themselves rose. The key questions now are how long this tailwind will last and whether it will translate into larger dividends for shareholders.

On November 3, Meritz Securities maintained its target price of KRW 90,700 for POSCO International and its "Buy" rating. The stock closed at KRW 51,400 the previous day, November 2.

POSCO International's operating profit for the third quarter of 2026 was KRW 400.7 billion, up 24.0% from the same period a year earlier. It slightly exceeded the market consensus of KRW 388.8 billion, marking a strong performance. Revenue rose just 9.6% over the same period to KRW 9.0268 trillion. Analysts say higher raw material prices were now being fully reflected in the company's results.

Senex Energy, the Australian gas company, stood out in particular. Its third-quarter operating profit rose 106.1% year over year to KRW 55.1 billion. The increase was largely driven by a roughly 55% rise in sales volume as gas production expanded. The company also recorded significant growth as revenue from terminals that liquefy and export natural gas made up a larger share of its business. In other words, it had more product to sell just as prices were rising.

The Myanmar gas field also contributed. Operating profit reached KRW 98 billion as both sales volume and prices increased, up 8.9% from a year earlier. In the power generation business, operating profit rose 22.0% year over year to KRW 85.2 billion despite lower plant utilization rates. Higher prices for electricity sales supported profitability.

The next challenge is to further increase the amount of gas it secures. In September 2026, POSCO International signed an agreement to acquire U.S. shale gas assets worth approximately KRW 800 billion. The company plans to close the deal by the end of November. Meritz Securities projected that the assets would contribute around KRW 100 billion in annual operating profit starting in 2028. It also expects POSCO International to pursue the acquisition of gas assets in Southeast Asia in the first half of 2027.

Artificial intelligence (AI) is behind the company's large investments in gas. Moon Kyung-won, an analyst at Meritz Securities, highlighted growing electricity demand, driven primarily by AI, and the shortage of transmission networks to carry that electricity, which is increasing the need for gas-fired power generation. The analysis is that rising electricity demand will support gas demand.

The company is also expanding its capacity to receive and store gas. A key example is the Gwangyang LNG Terminal No. 2, which is due for full commissioning this month. Its storage capacity will increase from 930,000 kiloliters to 1.33 million kiloliters. The company says it will also be able to generate additional profits by taking advantage of price differences between European and Asian LNG markets.

Dividends are another point of interest. Based on the previous day's closing price, Meritz Securities estimated a dividend yield of 6.3% for the second half of 2026 and the first half of 2027 combined. "Its estimated price-to-earnings ratio (PER) for next year is 8.2 times, significantly below the 15.3 times for leading global gas-related investment companies and Japanese trading houses," Moon said. "Even considering dividends alone, excluding capital gains, the stock is attractively priced and could offer a stable alternative amid an uncertain macroeconomic environment."

This content was produced with the assistance of AI translation services.