Posco profits plummet as storm costs consume bottom line

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Posco profits plummet as storm costs consume bottom line

Posco employees help with recovery at its Pohang steel plant in North Gyeongsang on Sept. 17. [POSCO]

Posco employees help with recovery at its Pohang steel plant in North Gyeongsang on Sept. 17. [POSCO]

 
Posco Holdings reported a 71 percent drop in operating profit in the third quarter on year.
 
The results were disclosed Wednesday in a preliminary earnings report, which did not detail net profit.
 
Posco Holdings said its operating profit during the July-to-September period was 900-billion-won ($631.3 million). That's down 57.1 percent on quarter.
 
The company reported 440 billion won of expenses related to damage at a steel rolling facility in Pohang, Gyeongsang, during a September typhoon. The amount includes both recovery costs and potential loss for shutting down the production, according to Posco Holdings.
 
Posco halted operations of its rolling facilities on Sept. 7 due to factory flooding caused by Typhoon Hinnamnor. It was the first time for Korea’s largest — and the world’s fifth largest — steelmaker to halt an operating line in 49 years.
 
The company said it began recovery efforts straight after the storm but that it will take three months for the rolling facilities to be operational again.
 
“Posco Holdings can withstand the 57-percent quarter-on-quarter fall in its Q3 2022 operating profit because of its robust leverage metrics and large liquidity buffer,” wrote Sean Hwang, assistant vice president and analyst at Moody’s Investors Service.
 
“The earnings decline mainly reflected weakening steel prices and one-off costs relating to the flood in September."
 
Posco Holdings will release full results on Oct. 24.

BY YOON SO-YEON [yoon.soyeon@joongang.co.kr]
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