UPDATE 1-POSCO Q4 profit slumps, warns of 10 pct cut in 2013 sales

Tue Jan 29, 2013 2:44am EST
 
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* Q4 operating profit 379 billion won vs 490 billion won consensus

* Targets 32 trillion won in 2013 sales, down 10 percent year-on-year

* Plans to invest 4 trillion won in 2013, up from 3.6 trillion last year

SEOUL, Jan 29 (Reuters) - POSCO, the world's No.5 steelmaker by output, reported a 51 percent slump in quarterly operating profit as tepid demand and falling prices offset lower raw material costs helped by a firmer local currency.

The South Korean steelmaker on Tuesday forecast its 2013 sales may drop 10 percent to 32 trillion won ($29.3 billion), but said it would raise investment 11 percent to 4 trillion won this year to stay competitive.

POSCO, backed by billionaire investor Warren Buffett, said that its operating profit for October to December fell 51 percent to 379 billion won ($346.7 million) on a parent basis that does not reflect earnings of affiliates from a year earlier, below a consensus forecast of 490 billion won in a Reuters' poll of 25 analysts.

The fourth-quarter result compared with a 771 billion won operating profit a year earlier. Fourth-quarter sales fell 20 percent to 8.07 trillion won, compared with a consensus forecast of 8.35 trillion won.

POSCO has been posting higher margins than its bigger peers ArcelorMittal SA, Nippon Steel & Sumitomo Metal Corp , backed by its dominant position in the domestic market and its cost efficiency.   Continued...