South Korean steel giant POSCO has reported that its operating profit for the third quarter of 2009 halved but gave a full-year profit target that implies a recovery in the fourth quarter based on healthier demand and lower costs.
Accordingly, Pohang, South Korea-based POSCO has raised its full-year forecasts and said its operating profit may reach KRW 3.2 trillion ($2.7 billion) for the year, up from an earlier forecast of KRW 2.6 trillion. The company said the steel industry's recovery would continue through the fourth quarter and 2010. The steelmaker also raised its 2009 sales target to KRW 27.1 trillion from KRW 25.8 trillion; however, it lowered its annual crude steel output estimate to 29.5 million mt from 29.8 million mt.
In the third quarter of 2009, the steelmaker achieved an operating profit of KRW 1.018 trillion ($874.7 million), down by 49 percent from a year earlier, while its sales declined by 22.3 percent year on year to KRW 6.85 trillion in the period in question.
Meanwhile, the third quarter revenue of POSCO fell by 22.3 percent year on year to KRW 6.85 trillion, but was up by eight percent compared to the previous quarter.
In the three months ended September 30, the steel giant's net profit declined by 6.2 percent year on year to KRW 1.14 trillion, but increased by 165 percent compared to the quarter ended June 30 as a stronger won helped cut costs of imported raw materials. During the third quarter, the South Korean won gained 8.1 percent against the US dollar, after an 8.6 percent jump in the previous quarter.
In July, POSCO restarted its No. 4 furnace in Gwangyang after a maintenance shutdown. The 3.1 million mt furnace was shut in February.