Seoul: South Korean steel giant Posco said on Tuesday its fourth quarter net profit sank 45% from a year earlier as higher raw material costs and lower product prices cut into the bottom line.
Consolidated net profit in the October-December period fell to 561 billion won ($515 million) from 1.02 trillion won a year earlier, the company said in a statement.
Operating profit declined 43% to 581 billion won, and sales were down 19% to 15.07 trillion won.
The company attributed the decline to higher iron ore prices and weak orders from shipbuilders and home appliances makers.
Posco, the world’s fourth biggest steel maker by output, derives 40% of its total revenue from overseas but the impact of the won’s strength has been offset by higher import volumes.
Its total earnings in 2012 plunged 36% from a year ago to 2.39 trillion won. Sales fell 7.7% to 63.6 trillion won, and operating profit dropped 33.2% to 3.65 trillion won.
Last year Posco’s sales of high-priced steel products increased, but the global economic slump and an oversupply ate into its overall sales and operating income. This year the company aims to post sales of 66 trillion won.
Dow Jones Newswires contributed to this story.