Showing posts with label POSCO. Show all posts
Showing posts with label POSCO. Show all posts

October 14, 2010

POSCO’s earnings decrease 8.6% despite 24.4% increase in sales

Korea’s leading steelmaker Pohan Steel and Iron Corporation (POSCO) reported yesterday that its third quarter earnings declined 8.6 percent from a year earlier on increased costs of raw materials. Net income for this period (July-September) was 1.04 trillion won ($919 million) as compared to a profit of 1.14 trillion won a year earlier, the company said in a regulatory filing. Sales increased 24.4 percent to 8.52 trillion won over the cited period, and operating income gained 9.1 percent to 1.11 trillion won, it said. According to the company sources the main reason for this downfall in company profit has been a sharp rise in the costs of iron ore and other materials although such gains could not be fully reflected in the product prices.

Compared to the previous quarter, Posco’s third-quarter earnings were down 12.7 percent. In April, Posco increased prices for key products by as much as 25 percent, citing a jump in prices of imported iron ores and coal. But it did not raise steel prices during the third quarter. Its crude steel production increased 4.2 percent to 8.21 million tons in the third quarter from a year earlier, and sales of steel products gained 2.8 percent to 7.74 million tons.
POSCO, however, cut its sales target for the year to 32.9 trillion won from an earlier 33.5 trillion won, citing weak overseas demand. The steelmaker said it aims to generate an operating income of 5.2 trillion won this fiscal, is also lower than the previous target of 5.6 trillion won. The company said it plans to increase spending on facility investment and acquisitions to 10.4 trillion won this year. POSCO, the world's No.3 steelmaker, also signaled a weak sector outlook as it cut its annual profit forecast by 7 percent after reporting dismal quarterly earnings on sluggish demand in a fragile economy.

October 13, 2010

POSCO enters into a Joint Venture with Indonesia’s Krakatau Steel

Korean steel producer Pohan Steel and Iron Corporation (Posco) signed a joint venture agreement in August this year to build and operate a $6 billion steel plant in Cilegon, Banten, with Indonesia’s largest steel maker PT Krakatau Steel. PT Krakatau Steel is a state-owned steel producer having 60% market share of steel plate market. The new integrated mill with an annual capacity potential of 6 million tons will be constructed in two phases, with the first phase of 3 million tons expected to start in the second half of 2010 and target to run with full capacity by 2014.  
As per the agreement, POSCO will have an initial share of 70% in the new company while Krakatau Steel has the option of increasing its stake up to 45% in the second phase of expansion. Presently Pohan Steel and Iron Corporation (POSCO) is the world’s third largest steelmaker and supply mainly to the shipbuilding and construction industries. The company has been growing internationally in many countries - Australia (70% share in Sutton Forest coal mine and 24.5% in API Iron Ore mine), China (contract with Jilin Province and manufacturing of processing centers), India (Orissa project and joint venture with SAIL), Brazil (20% stake in Brazilian steelworks project together with Tongue Steel Mill and Vale S.A) and Indonesia (Krakatau steel project).  
After US$ 6 billion investment commitments from South Korean steel maker POSCO in August, Indonesia now expects more investments to follow from large companies of that country. Interestingly, South Korea is the sixth biggest foreign country investing in Indonesia.