POSCO Lowers Targets As Won Remains Weak

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POSCO Lowers Targets As Won Remains Weak

A weaker won and higher raw material prices have caused Korea's largest steelmaker to lower its earnings and investment targets for this year.

Pohang Iron & Steel Co., commonly known as POSCO, said it plans to outline for a group of investors Wednesday the details of its latest downgrade of its revenue and investment targets for 2001. The steelmaker has lowered its net profit target to one trillion won ($760 million) from 1.2 trillion won. "The won's drop, raw material price hikes and steel export price declines have made it difficult for us to reach our original goals," an official at the steel firm said.

POSCO imports $3 billion of raw materials annually. The steelmakers currently carries about $1.78 billion in debt. The company's 2001 business plan, is based on 1,150 won per dollar. The POSCO official said the firm is concerned about increases in higher prices for imported iron ore and coal.

POSCO plans to slash this year's capital investment target from 2.4 trillion won to 2 trillion won. To reduce losses from foreign exchange rates, the company will cut its dollar-denominated debt to 14.5 trillion won, according to the official.

Dongkuk Steel Mill and Hyundai HYSCO also are considering adjustments in this year's business goals, according to these companies. "We depend almost singularly on imports to secure raw materials," said an official at Hyundai. "So the weakening won is a burden for us."



by Kim Nam-joong

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