SEOUL (Reuters) - South Korean steelmaker POSCO 005490.KS posted a 56.1% drop in its fourth-quarter operating profit as higher raw material costs squeezed its margins, and said it expected lower sales in 2020 on weaker global steel demand growth.
The world’s fifth-biggest steelmaker reported 2019 earnings on Friday without disclosing numbers for October-December.
Reuters calculations showed consolidated operating profit for the fourth quarter dropped to 558 billion won ($478 million) from 1.3 trillion won during the same period a year earlier.
That was below an average estimate of 731 billion won from 20 analysts, according to Refinitiv SmartEstimate.
In 2019, prices of iron ore, key raw material for making steel, soared more than 140% from 2018 due to Brazilian supply cuts following a dam collapse at one of Vale’s mine in Brazil.
For 2020, the steelmaker said it expects lower consolidated sales at 63.8 trillion. It also said its capital expenditure and other investments are expected to be 6 trillion won in 2020.
POSCO shares were down 1.3% by 0558 GMT after the earnings release, while the wider market .KS11 was 0.7% lower.
Reporting By Jane Chung; Editing by Kim Coghill and Tom Hogue
Our Standards: The Thomson Reuters Trust Principles.