Moody’s Investors Service, a leading global credit rating firm, has revised up Posco’s ratings outlook to positive from stable, citing ongoing improvement in the company’s financial health thanks to a recovery in the global steel industry and brisk sales of its high-value added products.

The upgrade came a year after Moody’s raised Posco’s ratings outlook to stable from negative last October.

The global credit rating agency forecasted that Posco’s financial profile would continue to improve over the next one to two years as the recovery in the global steel industry and a rise in sales of the company’s value-added products are expected to lift its earnings further and improve its balance sheet.

It also projected Posco’s earnings before interest, taxes, depreciation and amortization (EBITDA) would jump 20 to 25 percent on year over the next 12 to 18 months and its adjusted debt/EBITDA ratio would fall to 2.8 from 4.1 last year. It also expected profitability in Posco’s construction unit Posco Engineering & Construction Co. would improve.

Posco shares were further boosted by the upgrade on the heels of strong third-quarter earnings.

As of 2:53 p.m. Friday, shares of Posco were 3.02 percent up at 341,500 won from the previous session.

Posco on Thursday reported a 9 percent on-year growth in its operating profit for the last quarter that ended in September to 1.1 trillion won ($977.3 million). Net profit nearly doubled to 906.6 billion won on sales of 15.04 trillion won over the same period.

“Posco has been trying hard to enhance competitiveness of its mainstay steel business and improve the balance sheet since the inauguration of CEO Kwon Oh-joon in 2014 to fight back an oversupply and growing trade protectionism,” said an unnamed official at Posco. Since Kwon started spearheading the steel group’s massive restructuring in 2014, the steel maker has completed about 98 percent of its planned restructuring as of the third quarter and is expected to streamline its affiliates to 38 following the completion of the reorganization.

By Moon Ji-woong and Lee Ha-yeon

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