Posco profit falls by 48%
Bloomberg News
WEDNESDAY, APRIL 12, 2006
SEOUL Posco, the world's fifth- largest steel maker, said Tuesday that first-quarter profit fell 48 percent after rising competition from China pushed down prices and maintenance work curbed production.
Net income was 681 billion won, or $714 million, in the three months ended March 31, from 1.3 trillion won a year earlier, the South Korea company said. Sales fell 18 percent, it said.
Posco was forced to cut prices for two straight quarters as increasing output from China, which produces a third of the world's steel, spilled over to neighboring countries like South Korea and Japan. Posco said it expected prices to rise this year as U.S. and Japanese steel makers curbed production.
"Chances of further declines in steel prices are less likely," said Kim Jun Ki at Hanwha Investment Trust Management in Seoul. "Still, the question is whether demand will be strong enough."
Shares of Posco fell 1,500 won to close at 239,500 won in Seoul. The results, which are higher than the median estimate of 617 billion won forecast by 10 analysts surveyed by Bloomberg News, were released after the market's close. |
