By Kwanwoo Jun
Posco's first-quarter net profit nearly tripled from a year earlier, driven by higher steel prices on growing demand amid hopes for an economic recovery from the coronavirus pandemic.
Net profit for the quarter ended April 31 was 1.139 trillion won ($1.02 billion), compared with KRW434.70 billion a year earlier, the South Korean steelmaker said Monday. This beat a FactSet-compiled consensus forecast of KRW876.38 billion.
Revenue during the quarter rose 10% to KRW16.069 trillion, above the company's preliminary forecast, while operating profit more than doubled from a year earlier to KRW1.552 trillion.
The company attributed the solid quarterly earnings growth to stronger profit margins on higher prices for steel products.
Steel makers globally stand to benefit from brisk demand in auto, construction and shipbuilding industries, supported by fiscal stimulus and recovery hopes, according to analysts.
Posco said its strong earnings were also supported by solid growth at its subsidiaries, including its trading arm and chemical unit ramping up its production of materials used in electric-vehicle batteries.
In 2020, Posco's revenue fell 10% and net profit dropped 9.8%, as pandemic-suppressed steel demand and lower average selling prices weighed on earnings.
Posco's shares traded 0.4% lower at KRW354,000 after the release of its first-quarter earnings.
Write to Kwanwoo Jun at email@example.com
(END) Dow Jones Newswires
April 25, 2021 22:25 ET (02:25 GMT)Copyright (c) 2021 Dow Jones & Company, Inc.