[Yonhap News Photo]
South Korean steel giant Posco has bounced back from a prolonged slump to report a 5.2 percent rise in its first-quarter earnings following years of restructuring, cost reduction and a strategic shift to higher-value products.
A corporate earnings report released by Posco on Thursday showed that its first-quarter net profit rose 5.2 percent from a year earlier to 352.5 billion won (310 million US dollars) on a consolidated basis.
Operating profit fell 9.8 percent on-year to 659.8 billion won while sales were down 17.5 percent to 12.5 trillion won. Compared to the previous quarter, Posco's earnings improved dramatically thanks to rising prices for iron ore the company has bought in advance.
Posco has responded to China's oversupply by restructuring and diversifying into trading, engineering, and construction. This year, the company benefitted from a good performance by its trading segment.
This year Posco has raised selling prices for its steel products as a global glut forced China to cut its steel production by up to 150 million tons.
China's crude steel output fell 2.3 percent on-year to 803.8 million tons in 2015, the first drop in more than three decades as the world's second-largest economy lost steam.
China is pushing to fight overcapacity in the steel industry, as it aims to shift economic growth towards more consumption rather than heavy investment.
In 2015, Posco reported 96 billion won in net loss, compared to a net profit of 557 billion won a year earlier. This year, it aims to post 58.7 trillion won in total sales and produce 37.2 million tons of steel.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
