POSCO expects sluggish market restoration in 2023 after huge drop in annual revenue
By Hyunsu Yim
SEOUL (Reuters) – POSCO Holdings, mum or dad of South Korea’s greatest steelmaker POSCO, on Friday reported a 46.7% drop in working revenue for 2022 on account of a four-month suspension of its main metal plant within the nation following a storm and flooding in September.
The corporate reported an working revenue of 4.9 trillion received ($3.97 billion) for 2022, versus a 9.2 trillion received revenue a 12 months earlier.
It made an working lack of 425 billion received within the fourth quarter on account of pricey flood harm and as metal market situations deteriorated.
The corporate had estimated earlier the flooding would price it 1.3 trillion received in 2022.
Earlier this month, POSCO mentioned operations at the entire 17 rolling mills at its plant in Pohang, southeast of the nation, had been totally restored, 135 days after a storm triggered a close-by river to overflow.
“The Ukraine battle and the worldwide provide chain downside reminiscent of points round automotive chip provides will proceed to restrict demand restoration.” head of promoting technique Eom Gichen informed analysts on an earnings name.
Eom mentioned steelmakers would elevate costs on account of inflation and rising uncooked materials prices however added that China’s financial restoration, helped by elevated immunity to COVID and the nation’s efforts to spice up spending, may spur a market restoration within the second half of 2023.
The corporate mentioned it expects to see annual income of 85.8 trillion received this 12 months, just like the earlier 12 months’s 84.8 trillion received.
Analysts anticipate earnings on the world’s sixth-biggest steelmaker to enhance this 12 months on the again of the manufacturing resumption, though an unsure world financial outlook is more likely to maintain progress of general metal demand in verify. World metal demand is projected to rise by 1% this 12 months, primarily based on the World Metal Affiliation’s estimate from October. “The fourth quarter of 2022 is the bottom efficiency level (for POSCO). Earnings are anticipated to enhance swiftly as gross sales volumes will recuperate within the first half and world demand will enhance within the second half,” analyst Ahn Hoe-soo at eBest Funding & Securities mentioned in a latest report.
($1 = 1,233.7400 received)
(Reporting by Hyunsu Yim. Modifying by Jane Merriman)