POSCO, South Korea's leading steelmaker, said Thursday that its second-quarter net profit sank 48 percent from a year earlier on weak demand and decreased prices.
Net profit reached 241 billion won (US$216 million) on a consolidated basis in the April-June period, compared with a profit of 466 billion won a year earlier, the company said.
Sales dipped 5.4 percent on-year to 15.6 trillion won, and operating income also dropped 30.5 percent to 903 billion won over the cited period, it said.
Shares of POSCO closed at 327,000 won on the Seoul bourse, up 0.15 percent from the previous session's close. The second-quarter business results were released after the market closed.
From the previous quarter, however, sales rose 7 percent and its operating income rose 26 percent.
POSCO attributed the poor business results to a decline in prices and weak demand amid the global economic downturn.
For the first half, its ratio of operating income to sales stood at 8.3 percent. POSCO expects demand from shipbuilding and automakers to improve during the second half of the year.
POSCO said its crude steel output reached 8.85 million tons in the April-June period, compared with 9.06 million tons the previous quarter. Sales of steel products reached 8.41 million tons in the second quarter, down from 8.43 million tons, it said.
Despite business uncertainties, POSCO decided to maintain its annual sales target at 64 trillion won on a consolidated basis, expecting demand for steel to recover down the road.
The company said it aims to produce 37 million tons and sell 35 million tons of steel products this year.
POSCO also said it plans to invest up to 8 trillion won in facilities and technology this year.
But the steelmaker said its spending for next year will be cut by up to 2 trillion won as it aims to beef up its financial status.