Posco's profit falls

South Korea’s Pohang Iron and Steel Co. (Posco) posted a 69% drop in quarterly profit amid slack demand and higher costs arising from a weaker won, though some analysts see the steelmaker poised for recovery. Posco cut crude steel production in December for the first time since it began operations in 1973 and continued to cut output in the first quarter to hold down inventories. Net profit for the first quarter of 2009 fell to 325 billion won (US$245 million) from 1.031 trillion won (US$773.74 million) year on year. Its sales had risen 6.7% to 6.47 trillion won (US$4.86 billion), helped by higher product prices. Expecting economic improvements in the later half of the year, Posco said it will ease up on production cuts and might consider lowering product prices, as it is faring well by prioritizing cost competitiveness. It cut costs by improving fuel-efficiency in its blast furnaces.Meanwhile, it has lowered this year’s sales target to 25 trillion won (US$18.76 billion) from a range of 27 trillion won (US$20.26billion) to 30 trillion won (US$22.51billion), while cutting its steel-output projection to 28 million metric tons from 29 million to 32 million tons. (April 11, 2009)