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POSCO Secures Control of Sampoerna Agro in KRW 1.3T Deal
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Key Takeaways
POSCO gained control of Sampoerna Agro, expanding its palm plantation footprint by 128,000 hectares.
The acquisition adds fruit-producing estates and strong seed development capabilities to POSCO's portfolio.
A new East Kalimantan refinery boosts POSCO's operations with 500,000-ton annual processing capacity.
POSCO Holdings, Inc.’s (PKX - Free Report) unit POSCO International has taken a significant step in its agro-business by establishing a fully integrated palm oil value chain, spanning from palm seed development to the production of refined palm oil used as a biofuel feedstock. On Nov. 19, the company gained management control of Sampoerna Agro, a leading Indonesia-listed palm plantation operator. This move involved an investment of approximately KRW 1.3 trillion, making POSCO International the company’s largest shareholder.
PKX Broadens Global Palm Plantation Footprint
POSCO expanded its plantation footprint with the acquisition of Sampoerna Agro by an additional 128,000 hectares, an area more than twice the size of Seoul. This increases the company’s total global palm plantation area to roughly 150,000 hectares, including its established operations in Papua, Indonesia. The newly added plantations are already fully mature and producing fruit, enabling POSCO to secure immediate and stable profit generation without the long waiting period typically required for new palm trees to reach harvest age.
Sampoerna Agro also brings strong upstream capabilities. The company operates its own palm-seed subsidiary and research institute, together accounting for the second-largest share of Indonesia’s palm-seed development market.
POSCO also marked the launch of a new palm oil refinery in East Kalimantan, Indonesia, developed through its joint venture with GS Caltex under PT ARC (AGPA Refinery Complex). POSCO owns 60% of the venture, which involves an investment of $210 million. The refinery is designed with an annual processing capacity of 500,000 tons, a scale comparable to nearly 80% of South Korea’s yearly refined palm oil imports.
This end-to-end integration from seed development to refining establishes POSCO as a fully integrated palm oil operator. This strengthens its competitiveness and supports national food security by lowering Korea’s reliance on imported palm oil. Producing refined palm oil for biodiesel aligns with POSCO’s long-term growth strategy under its “Two Core + New Engine” roadmap.
Shares of PKX are down 3.1% year to date against its industry’s rise of 10.3%
The Zacks Consensus Estimate for EQX’s current fiscal-year earnings is pegged at 48 cents per share, indicating a 140% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, with the average surprise being 87%.
The Zacks Consensus Estimate for GLNCY’s current fiscal-year earnings is pegged at 20 cents per share, indicating a 1900% year-over-year increase. The consensus estimate has been trending higher over the past 30 days.
The Zacks Consensus Estimate for CSW’s current fiscal-year earnings is pegged at $10.4 per share, indicating a 24% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 7%.
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POSCO Secures Control of Sampoerna Agro in KRW 1.3T Deal
Key Takeaways
POSCO Holdings, Inc.’s (PKX - Free Report) unit POSCO International has taken a significant step in its agro-business by establishing a fully integrated palm oil value chain, spanning from palm seed development to the production of refined palm oil used as a biofuel feedstock. On Nov. 19, the company gained management control of Sampoerna Agro, a leading Indonesia-listed palm plantation operator. This move involved an investment of approximately KRW 1.3 trillion, making POSCO International the company’s largest shareholder.
PKX Broadens Global Palm Plantation Footprint
POSCO expanded its plantation footprint with the acquisition of Sampoerna Agro by an additional 128,000 hectares, an area more than twice the size of Seoul. This increases the company’s total global palm plantation area to roughly 150,000 hectares, including its established operations in Papua, Indonesia. The newly added plantations are already fully mature and producing fruit, enabling POSCO to secure immediate and stable profit generation without the long waiting period typically required for new palm trees to reach harvest age.
Sampoerna Agro also brings strong upstream capabilities. The company operates its own palm-seed subsidiary and research institute, together accounting for the second-largest share of Indonesia’s palm-seed development market.
POSCO also marked the launch of a new palm oil refinery in East Kalimantan, Indonesia, developed through its joint venture with GS Caltex under PT ARC (AGPA Refinery Complex). POSCO owns 60% of the venture, which involves an investment of $210 million. The refinery is designed with an annual processing capacity of 500,000 tons, a scale comparable to nearly 80% of South Korea’s yearly refined palm oil imports.
This end-to-end integration from seed development to refining establishes POSCO as a fully integrated palm oil operator. This strengthens its competitiveness and supports national food security by lowering Korea’s reliance on imported palm oil. Producing refined palm oil for biodiesel aligns with POSCO’s long-term growth strategy under its “Two Core + New Engine” roadmap.
Shares of PKX are down 3.1% year to date against its industry’s rise of 10.3%
Image Source: Zacks Investment Research
PKX Zacks Rank and Key Picks
PKX currently carries a Zacks Rank of #4 (Sell).
Some better-ranked stocks in the Basic Materials space are Equinox Gold Corp. (EQX - Free Report) , Glencore Plc. (GLNCY - Free Report) and CSW Industrials, Inc. (CSW - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1(Strong Buy) Rank here.
The Zacks Consensus Estimate for EQX’s current fiscal-year earnings is pegged at 48 cents per share, indicating a 140% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, with the average surprise being 87%.
The Zacks Consensus Estimate for GLNCY’s current fiscal-year earnings is pegged at 20 cents per share, indicating a 1900% year-over-year increase. The consensus estimate has been trending higher over the past 30 days.
The Zacks Consensus Estimate for CSW’s current fiscal-year earnings is pegged at $10.4 per share, indicating a 24% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 7%.