South Korea POSCO's 2020 profit falls 38% due to sluggish steel demand
- For 2021, POSCO said it expects higher consolidated sales at 59.4 trillion won. It also said its capital expenditure and other investments are expected to be 6.1 trillion won in 2021.
SEOUL: South Korean steelmaker POSCO's operating profit in 2020 slumped 38% from the year before, mainly as margins declined because the coronavirus pandemic cut steel demand while raw material prices rose, the company said on Thursday.
The world's fifth-biggest steelmaker reported 2020 operating profit of 2.4 trillion won ($2.15 billion), according to the company statement.
POSCO's fourth-quarter operating profit was 863 billion won ($771.42 million), the statement said, versus an average estimate for an 850 billion won profit from 15 analysts, according to Refinitiv SmartEstimate.
Consolidated operating margins in 2020 were 4.2%, down from 6% in 2019, the company said. The margins were pressured by a "delayed reflection of rising raw material price on product prices," it said.
Benchmark Chinese iron ore prices surged in 2020, breaking the 1,000 yuan ($154.04) per tonne level for the first time in December, on supply concerns and as commodity-intensive stimulus measures in China fuelled demand.
For 2021, POSCO said it expects higher consolidated sales at 59.4 trillion won. It also said its capital expenditure and other investments are expected to be 6.1 trillion won in 2021.
POSCO shares closed down 3.7% before the earnings release, while the wider market closed 1.7% lower.
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