Posted on 01/17/10 at 8:11am by Lisa Bloom
Posco(NYSE:PKX), Asia’s most profitable steelmaker and Korea’s leading steelmaker, is
The company will invest $8.3 billion (9.3 trillion won) this year, including 3 trillion won that could be used in aggressive mergers and acquisitions.
“We will continue our cost cutting in preparing for an extended recession while at the same time pursuing aggressive management to seize opportunities in the post-crisis period,” said Posco Chairman Chung Joon-yang.
Chung told reporters that POSCO is more interested in buying Daewoo International than in other local firms like Daewoo Engineering & Construction because it wants to create synergy in overseas resources development and materials business.
Daewoo Shipbuilding shares increased 13.69 percent, Daewoo International shares were up 1.77 percent and Daewoo Engineering rose 2.37 percent, following the announcement by POSCO.
Meanwhile, Posco posted the highest net income in six quarters and said capital expenditure will soar to a record this year as demand rebounds with the global economic recovery.
Net income advanced to 1.28 trillion won ($1.1 billion) in the three months ended Dec. 31, from 721.4 billion won a year earlier, according to calculations derived from full-year results released. Spending for 2010 will reach 9.3 trillion won, and sales will surge 9.3 percent, it said.
The global steel market has bottomed and will grow by 9.2 percent in 2010 as demand rebounds in the U.S., Europe and Japan, the World Steel Association said Oct 12. Posco is planning $30 billion of overseas expansion in India, Indonesia and Vietnam to regain its spot as Asia’s largest steelmaker.
“Posco was able to recover faster than anybody in the market,” the company said in the statement. “We weathered the crisis by cutting output by only 20 percent in the first half, while global rivals had to cut by more than 40 percent.”
Shares of Posco, which counts Warren Buffett’s Berkshire Hathaway Inc.(NYSE:BRK.A) as a stakeholder, fell 0.7 percent to close at 592,000 won in Seoul trading. They rose 63 percent last year compared with an 89 percent gain in ArcelorMittal(NYSE:MT), the world’s largest steelmaker.In 2010, POSCO plans to refurbish the No 4 blast furnace in Pohang, complete a steel plate mill in Gwangyang, seek merger and acquisition opportunities in the local market and accelerate procedures to build steel plants in India and Indonesia.
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