Operating profit for South Korean steelmaker POSCO in 2020 fell 38% from the previous year, mainly due to the fact that the coronavirus pandemic has reduced demand for steel and prices for raw materials have risen, the company said on Thursday.
The world’s fifth-largest steelmaker reported operating profit in 2020 of 2.4 trillion won ($ 2.15 billion), according to the company.
According to Refinitiv SmartEstimate, POSCO’s fourth-quarter operating profit was 863 billion won ($ 771.42 million), compared with an average profit estimate of 15 analysts of 850 billion won.
The consolidated operating margin in 2020 was 4.2%, up from 6% in 2019, the company said. Margins were weighed down by “a belated reflection of rising commodity prices and product prices,” the report said.
China’s benchmark iron ore prices surged sharply in 2020, surpassing 1,000 yuan ($ 154.04) per tonne for the first time in December, amid supply concerns and stimulus measures in China. stimulating commodities, boosted demand.
In 2021, POSCO said it expects a 59.4 trillion won increase in consolidated sales. The company also said its capital expenditures and other investments are expected to be 6.1 trillion won in 2021.
POSCO shares closed 3.7% lower ahead of the earnings release, while the broader .KS11 market closed 1.7% lower.