Korean steel giant Posco saw its operating profit drop 32 percent in the third quarter from a year prior over rising raw material costs, the company said Thursday.
Its operating profit marked 1.04 trillion won ($887 million), with sales falling 2.6 percent to 15.9 trillion won, it said. Its net profit halved to 496.8 billion won in the July-September period, from a net profit of 1.05 trillion won a year earlier.
The earnings reflected rising material costs, dragging operating profit down 8.5 percent from the previous quarter.
The company, however, was able to retain 1 trillion won of operating profit over the relatively high profit earned from the gas operation by its trading arm Posco International and high completion rate of plant construction business by Posco Engineering and Construction.
The proportion of its high-end World Top Premium steel brand slightly rose by 0.3 percentage point to 29.9 percent.
The recovery of its local steel business is expected to be delayed due to reduced demand from auto and construction industries.
Demand for steel globally is expected to be led by China’s infrastructure and real estate projects but will see a gradual reduction from US and Europe, the company said in a statement.
Its trading arm, Posco International said it saw 5.89 trillion win sales with 163 billion won of operating profit, despite sluggish global economy and ongoing trade disputes.
By Cho Chung-un (email@example.com)