“Posco, Asia’s third-biggest steelmaker by output, forecast sales may fall this year after reporting worse-than-estimated fourth-quarter profit as waning orders from carmakers and shipbuilders lowered prices.
Sales on a parent basis may slip to 32 trillion won ($29 billion) in 2013 from 35.7 trillion won in 2012, the Pohang, South Korea-based company said in a regulatory filing today. Net income was 513 billion won in the three months ended Dec. 31, compared with 767 billion won a year earlier, missing the 592.6 billion won average of 18 analyst estimates compiled by Bloomberg.
China’s
economic slowdown and Europe’s fiscal crisis have reduced demand for steel used in houses, cars and ships, squeezing profits at global steelmakers. Posco (005490) today said an “unprecedented slump” in the worldwide steel market cut prices and hurt profits last year. The company also forecast its crude steel output may decline this year.
“Steel companies including Posco will have to accept the new normal — lower demand, lower price and narrower margin,” said Kim Hag Ju, chief investment officer at Woori Asset Management Co., which oversees $19 billion in assets. “We won’t see the steel boom era that we’ve watched in the past decade spurred by China’s growth.”
Posco fell 0.1 percent to 355,500 won at the close in Seoul today, while the local benchmarkKospi index gained 0.8 percent. The stock has climbed 1.9 percent this year, compared with a 2.1 percent drop in Kospi. (KOSPI) The earnings announcement came after the stock market closed.
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