Korea Zinc Co., the world’s third-biggest producer of refined zinc, said 2013 sales will probably decline, after reporting a 17 percent drop in fourth-quarter profit as a stronger won negated gains in metal prices.
Net income was 139.4 billion won ($128 million) in the three months ended Dec. 31, compared with 167.1 billion won a year earlier, according to a regulatory filing from the Seoul-based company today. The average of 17 analyst estimates compiled by Bloomberg was 158 billion won. Full-year revenue may drop to 5.18 trillion won in 2013 from 5.49 trillion won, the company said.
A stronger won cuts the South Korean smelter’s profit translated into the local currency. The company earned 80 percent of its standalone revenue overseas in 2011. The won gained 4.6 percent against the dollar in the fourth quarter, making the South Korean currency Asia’s best performing, while prices of zinc and lead averaged higher.
A 10-won appreciation reduces Korea Zinc’s operating profit by 10 billion won, Chris Kim, an analyst at Samsung Securities Co., estimated in a Jan. 14 report. The average price of zinc for immediate delivery rose 2 percent to $1,947.37 a metric ton in the quarter from a year ago, while cash lead gained 10 percent to $2,196.64 a ton. Cash silver averaged 2 percent higher at $32.5764 an ounce.
Korea Zinc fell 1.4 percent to 385,500 won at the close in Seoul today, bringing this year’s loss to 4.8 percent. The benchmark Kospi index declined 0.2 percent today.
Operating profit decreased 30 percent to 164 billion won in the fourth quarter, less than the 215.6 billion-won estimate from analysts. Sales gained 8 percent to 1.41 trillion won.