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S. Korean steel giant POSCO to post first ever net loss in 2015: sources

All News 23:02 January 18, 2016

SEOUL, Jan. 18 (Yonhap) -- South Korean steel giant POSCO is expected to post its first ever annual net loss in 2015 mainly due to excess supply and weak demand, industry sources said Monday.

Insiders said the prediction comes as the steelmaker announced net losses of 658.2 billion won (US$543.3 million) in the third quarter and estimated annual losses to hover around 300 billion won in its regulatory filing made on Oct. 20. The losses are due to the consolidated financial statement of various businesses under POSCO.

If the company posts losses it will be the first time since it was established in 1968.

The numbers are in stark contrast to POSCO's net earnings that were in the black by 4.2 trillion won as of 2010. Such sterling gains, however, have been falling steadily and after dropping to 1.35 trillion won in 2013, stood at 556.7 billion won in 2014.

Market watchers said excess supply, brought on by Chinese mills is the leading cause of POSCO's woes, along with settlement money it paid to Nippon Steel for patent rights violations.

It said a drop in value of foreign-invested companies and exchange rate fluctuations that caused losses for the company compounded its problems last year.

Market observers said that while POSCO will post a net loss when viewed from a consolidated financial statement view point, the steelmaker itself, without its subsidiaries, could report net earnings of around 346 billion won, with sales hitting 6.2 trillion won.

yonngong@yna.co.kr
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