On July 13, South Korea's leading steelmaker POSCO announced its financial results for the second quarter of 2009.
According to a regulatory filing released by POSCO, the company's net profit dropped by 71 percent to KRW 431 billion (US$328 million) in the second quarter of 2009 compared to KRW 1.48 trillion in the year-ago period, due to weak demand and falling steel prices.
Meanwhile, in the quarter in question, POSCO's sales fell by 15 percent to KRW 6.34 trillion over the cited period, while its operating income dropped by 91 percent to KRW 171 billion.
POSCO has attributed the weak performance to lower steel prices and weak demand.
Due to falling steel demand from builders and automakers against the background of the economic downturn, in December last year POSCO was forced to slash its production by 570,000 mt per month for the first time in its 40-year history.
On May 14, the Asian steel giant slashed prices for all its steel products by up to 20 percent to reflect falls in the cost of raw materials, saying the price cut would trim its annual sales by around KRW 2.7 trillion.
POSCO, aiming to cut KRW 1.295 billion in costs this year, has also revised its annual sales target down to KRW 25 trillion from the previous KRW 27 trillion to KRW30 trillion.
In addition, the company said that it is targeting KRW 2.6 trillion in operating profit and 29.8 million mt of crude steel production for this year.