POSCO, South Korea’s top steelmaker, has trimmed its facility investment for the year by more than 10 percent from its initial plan in order to improve its financial footing, industry sources said Sunday.

According to the sources, the steelmaker has lowered its capital spending for this year to 5.7 trillion won ($5.56 billion) from the original 6.5 trillion won. The figure includes investments by its affiliates. POSCO alone plans to spend some 3 trillion won this year, also lower than its earlier estimate of 3.7 trillion won.

In 2010, POSCO invested 11.2 trillion won, but its capital spending fell to 8.1 trillion won in 2011 and 7.2 trillion won in 2012.

Last year, its investment reached 8.8 trillion won.

The cut in capital spending came as the world’s fourth-largest steelmaker is suffering a decline in its profits, while its debts are growing steadily.

On a consolidated basis, its first-quarter operating income dropped 1.7 percent on-quarter to 731 billion won and its sales also sank 6.6 percent to 15.44 trillion won over the cited period, the data showed.

POSCO’s debt reached 40.58 trillion won as of March, up 5 percent, or 1.95 trillion won, from the end of last year, with its debt ratio standing at 89.6 percent, up 5.3 percentage points over the cited period. (Yonhap)