SEOUL, Jan 24 (Reuters) - South Korean steelmaker POSCO expects sales to rise in 2018 as Chinese steel prices should remain strong early this year thanks to Beijing’s efforts to cut production, the company said during the release of its fourth quarter results.
POSCO said on Wednesday its consolidated operating profit for the October to December quarter climbed to 1.15 trillion won ($1.08 billion), including affiliates’ earnings, up 144 percent from 472 billion won in the same period a year earlier.
Profits rose because of higher steel prices but fell short of market estimates.
The consensus operating profit estimate for the period compiled by Thomson Reuters I/B/E/S was for 1.25 trillion won.
POSCO said it expects 2018 revenue will rise to 61.9 trillion won from 60.7 trillion won in 2017. It will also boost its capital expenditures and other investments by 62 percent to 4.2 trillion won this year.
Steel futures in China, the world’s biggest steel consumer, surged 47 percent in 2017, the second year in a row of annual gains, on rising demand for materials and tightening supplies as Beijing pushed to cut overcapacity and pollution.
China’s economy grew faster than expected in the fourth quarter of 2017, as an export recovery helped the country post its first annual acceleration in growth in seven years.
POSCO’s share price has risen 16 percent so far this year, outpacing the wider market’s 2.9 percent gain. (Reporting by Hyunjoo Jin; Editing by Christian Schmollinger)