Posco cuts sales forecast further after profit slump

Posco, South Korea's biggest steelmaker, has cut its sales forecast for this year for a second time after reporting a 22 per cent slump in third-quarter profit.

The full-year sales estimate on a group basis was lowered to 63 trillion won (HK$460 billion) from a July prediction of 64 trillion won, Posco said yesterday.

The lower forecast, which followed an April reduction, comes after an economic slowdown in China, the world's biggest steel user, and Europe's debt crisis cut consumption and prices.

Posco said it would make "all efforts" to improve earnings as global steel demand was expected to recover this quarter.

"Posco's third-quarter operating profit was lower than I presumed," said Will Byun, an analyst at Woori Investment & Securities. "Steel prices will be generally weak until the end of this year. I expect a rise in prices at the end of the fourth quarter, but I don't think it will be huge."

Net income excluding minority interest was 567 billion won in the three months to September, down from 730.8 billion won a year ago, the company said. That missed the 650.3 billion won average of 13 analysts' estimates.