POSCO steel posts $2.6b in 2012 operating profit

Sales and operating profits of POSCO, the world’s fifth-largest steelmaker by output, fell in 2012 from the previous year, but outperformed rivals in profit margin on sales, the company said Tuesday.

Sales of POSCO Group’s steel business in 2012 dropped 9 percent to 35.7 trillion won ($33 billion) on-year. Operating profit from the steel business plunged 35.6 percent to 2.8 trillion won ($2.6 billion) in the same period.

The sharp fall in operating profit resulted from the impact of the global steel industry’s continued slump in demand, decline in product price and oversupply from Chinese steelmakers, analysts said.

“POSCO achieved a 7.8 percent profit margin on sales amid the grim industry outlook as it has shifted to high-value-added steel products and has cut operational costs,’’ the company said in a press release.

In a bid to overcome the prolonged economic downturn of the global economy, POSCO said it will diversify its core businesses from steel to energy and materials. For this year, the steelmaker said it aims to post sales of 66 trillion won on a consolidated basis, and to invest up to 8 trillion won in facilities and technology.

The combined sales of POSCO Group members posted 63.6 trillion won ($59 billion) in 2012, while combined operating profits marked 3.7 trillion won ($3.4 billion).

(jyseo@hearldcorp.com)