POSCO’s Q1 net surges on prices, equity gains
SEOUL-- POSCO, South Korea's largest steelmaker by sales, on Tuesday posted a net profit nearly three times higher than a year earlier in the first quarter helped by higher product prices and gains from equity ties with affiliates.
For the three months ended March 31, POSCO's net profit nearly tripled to 976.9 billion won (US$857 million) from 338.4 billion won a year earlier, the company said in a statement.
"Steel product prices increased by 88,000 won per ton in the first quarter (from a quarter earlier), boosting the quarterly results. Equity gains from (the steelmaker's) affiliates also helped," a company spokesman said.
Steel prices climbed to an average of 671,000 won a ton in the first three months from 583,000 won a quarter earlier and 551,000 won a year earlier, the statement said.
Operating profit also jumped to 1.365 trillion won from 659.8 billion won during the same period. Sales rose to 15.077 trillion won from 12.461 trillion won, it said.
The consolidated earnings results include first-quarter performances of parent company POSCO and its affiliates such as POSCO Daewoo, POSCO Energy and POSCO Engineering and Construction.
After being hit hard by lower demand following the 2008 financial crisis, the Pohang-based steelmaker has sold noncore assets and cut costs as part of restructuring efforts.
POSCO plans to reduce the number of its affiliates to 32 by the end of this year from 49 in 2014 and continue to lower its debt-to-equity ratio to regain financial health. Its debt-to-equity ratio fell to 71 percent in the March quarter from 77 percent a year earlier, the statement said.
For the whole of this year, POSCO aims to post 54.8 trillion won in sales, up from 53.1 trillion won it achieved last year. It has earmarked 3.5 trillion won for capital expenditures this year, up from 2.5 trillion won last year.
Source: Yonhap News Agency