International credit rating agency S&P Global Ratings (Standard & Poor's Ratings Services) has announced that it has revised the outlook of South Korean steelmaker Pohang Iron and Steel Co. (POSCO) to positive from stable and has affirmed its long-term corporate credit rating of 'BBB+'.
S&P stated that the outlook revision to positive reflects its expectation that POSCO is likely to maintain a strong operating performance and positive free cash flows over the next 12-24 months. According to S&P, POSCO is likely to generate strong and stable operating cash flows from its steel business over the next 12-24 months and it expects the company to maintain an EBITDA margin of around 20 percent, substantially higher than that of similar-sized global peers. S&P attributes POSCO's higher margin to the company's growing high value-added product sales mix, good operating efficiency, and stabilizing steel and raw material prices.