Seoul: Posco, the world’s third-largest steelmaker, said profit rose 38% to the highest in six quarters on higher prices and demand for steel. Net income rose to 982 billion won (Rs4,515 crore) in the first quarter ended 31 March from 713.3 billion won a year ago, the Pohang, South Korea-based company said in a statement on Thursday. Sales climbed 22%.
Rising demand in China and India, the world’s fastest- growing major economies, and the US, prompted steel makers globally to raise prices. Posco, which plans its next increase on 19 April, lifted this year’s operating profit estimate by 5% to 4.3 trillion won and sales by 6% to 22.6 trillion won.
Meanwhile, in a presentation to investors about its India plans on Thursday, Posco said that Prime Minister Manmohan Singh will meet government officials on 19 April to review its proposed $12 billion integrated steel complex project in Orissa. On Wednesday, it had tried to dispel concerns about delayed investment in the planned integrated steel complex. The company said it expected to win the Indian government’s approval for mining rights and complete the land purchase by the second half of the year
The venture, India’s largest foreign investment, has been delayed by a land dispute. The land, owned by the Orissa state government, hasn’t been fully cleared of people. Supporters have said the mill will create jobs, while opponents say they either want to halt the venture or claim that compensation offered is inadequate. Orissa chief minister Naveen Patnaik has assured to resolve the dispute within three months.
“Global growth is what’s driving demand,” said Cho Min Keon, who counts Posco shares among the $380 million he manages at Kyobo Investment Management Co. “Steel prices will stay strong for quite a while.”
Arcelor Mittal, the world’s biggest steelmaker, plans to increase prices in the US and restart idle plants because of rising demand and lower inventories.