Sunday, October 10, 2004 Asia Asia: "Posco Profit Probably Rose for Ninth Quarter, Helping Expansion
Oct. 11 (Bloomberg) -- Posco, South Korea's biggest steelmaker, is likely to report its ninth consecutive quarter of profit growth, helping fund expansion in China, India and Brazil as the company tries to diversify sales and secure raw materials.
Net income probably rose 72 percent to 861 billion won ($750 million) in the three months ended Sept. 30 from a year earlier, the median estimate of eight analysts polled by Bloomberg shows.
Posco, the world's most profitable steelmaker, and rivals including Nippon Steel Corp. have benefited from rising Chinese demand for cars, ships and other products. Pohang-based Posco is building mills abroad to reduce its dependence on the Korean market, which accounts for three-quarters of its sales.
``It's positive that Posco is looking at various markets,'' said Kim Hyun Wook, who helps manage $434 million in equities at KB Investment Trust Management Co. in Seoul. ``Investment plans overseas, such as India, would reduce the risks to its profits.''
Posco's shares have risen 23 percent since the end of June, almost double the 12 percent gain in the benchmark Kospi index. Posco's stock reached a record 190,000 won last week on optimism about earnings and investment plans.
The company is scheduled to report its earnings tomorrow. Analysts estimated operating profit would be 1.2 trillion won on sales of 4.9 trillion won -- both records. The company posted a record 915 billion won profit in the second quarter.
India, Brazil
Posco in August said it may build an $8.4 billion steel mill and iron ore mine in the Indian state of Orissa with BHP Billiton, the world's biggest mining company. India has the world's fourth-biggest iron ore "
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