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Bloomberg
Posco, South Korea’s largest steelmaker, posted the largest quarterly profit since 2013 as a property and infrastructure boom in China boosts global prices, lifting earnings at Asian mills.
Net income, excluding minority interests, was 539.3 billion won ($476 million) in the three months through September, after a 550
billion won loss a year earlier,
the Pohang-based company said in a statement Wednesday. Analysts expected profit of 587.4 billion, based on estimates compiled
by Bloomberg. Operating income beat expectations and was the highest since 2012.
Steel prices have climbed
more than 40 percent in 2016,
rallying from five years of losses. Baoshan Iron & Steel Co., the
listed unit of China’s second-biggest supplier, has posted its best quarterly profit since 2012, while India’s JSW Steel Ltd. may report better earnings this week. Posco’s margins expanded as the increase in steel prices exceeded gains in raw-material costs and the company pressed ahead with restructuring efforts.
“The company stands out from the others because it’s achieved economies of scale and continues to boost sales of higher-
valued products in response to market demand,†Will Byun, an analyst at NH Investment & Securities Co. in Seoul, said by phone before the earnings.
The shares of the world’s fourth-largest producer have surged almost 50 percent this year to close at 248,000 won in Seoul on Wednesday before the earnings, after plunging to the lowest level in more than a decade in January. The benchmark Kospi stock index has risen just 2.7 percent.
The company’s operating profit of 1.03 trillion won beat the 904.6 billion won estimated by analysts, and compared with 651.9 billion won a year earlier, according to the company. Sales of 12.7 trillion won missed estimates of 13.4 trillion won and compared with 14 trillion a year earlier.
The mill probably posted an increase in average carbon-steel
selling prices of 12,000 won a metric ton in the three months, more than double a 5,000 won rise in raw-material costs, Bae Eun-young, an analyst at EBest Investment & Securities Co., said in a report this month.