By Kwanwoo Jun
Posco Holdings' third-quarter earnings fell as the South Korean steelmaker struggled with flagging demand and lower prices.
The downbeat results reflect Korean steelmakers' challenges at home and abroad. The country's construction and housing markets remain sluggish, while Chinese rivals are flooding global markets with cheaper products.
Net profit over July-September was 497.00 billion won, equivalent to $359.0 million, down 9.6% compared with the same period a year earlier, Posco said Wednesday. That beat a revised FactSet-compiled consensus estimate of 477.53 billion won.
Revenue fell 3.4% to 18.321 trillion won, while operating profit dropped 38% to 743.00 billion won, below the FactSet consensus of 816.93 billion won.
Its steel business suffered from lower product prices and sluggish steel demand from China, with the segment's operating and net profit falling 45% and 58% on year, respectively, Posco said.
Analysts say China's overcapacity was causing industry-wide oversupply, as Chinese steelmakers increasingly rely on exports amid declining domestic steel consumption.
Still, Posco said it and Indian steel company JSW Group would seek to build a joint-venture mill in India with an annual production capacity of five million tons, with steel demand there likely to strengthen in the future.
Posco said its battery-material business still struggled with a fall in anode sales and a loss in the value of its inventory of cathode products amid slower electric-vehicle demand globally.
Posco Future M, a battery-material supplier affiliated with Posco Holdings, earlier posted a net loss for the second consecutive quarter, as its third quarter revenue dropped 28% compared with a year earlier.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
10-30-24 0310ET