Posco Weighs Business Structure Change After Profit Plummets
The company is weighing various measures, though no details on the proposed changes have been decided, Pohang, South Korea-based Posco said today in a regulatory filing. It didn’t specify whether it’s reviewing a possible sale of unit Daewoo International Corp.
The changes may include a plan to sell commodity trading company Daewoo International, (047050) in which Posco owns a 60 percent stake, the Korea Economic Daily reported today citing an unnamed company official. The steelmaker is considering several plans for Daewoo International, including a sale, and the proposals will be submitted to the company’s board on May 16, the newspaper said.
Posco last week lowered its spending target for 2014 by as much as 12 percent after reporting a 75 percent slump in first quarter earnings. The steelmaker is struggling with lower profitability as slowing growth in China and sluggish economies in Europe curb steel demand, dragging down prices.
Posco’s Chief Executive Officer Kwon Oh-Joon replaced Chung Joon Yang in March, who offered to step down in November saying the company needed new leadership to cope with “challenging business conditions.”
The steelmaker bought Daewoo for 3.37 trillion won ($3.3 billion) in 2010, adding nickel, coal, and oil and gas assets.
Posco rose 3.3 percent to 302,000 won at 10:15 a.m. in Seoul trading, clawing back some of this year’s loss of 7.4 percent.
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