Seoul - South Korea's Posco, the world's fifth-largest steelmaker, unveiled a ruthless revamp of its bloated business structure on Wednesday after reporting a sharp drop in second-quarter profit.
The steel giant said its consolidated net profit in the April-June period plunged 76 percent on-year to 117.4 billion won ($104-million) due to a global slump and losses among its subsidiaries.
Operating profit also shrank 18.2 percent on-year to 686.3 billion won and sales fell 9.1 percent to 15.2 trillion won.
The group, which has a total of 48 subsidiaries under its wing, said it would cut the number of its domestic-market businesses by half and jettison 30 percent of its overseas operations.
It also promised to liquidate redundant non-core businesses and save more than 500 billion won annually through an aggressive cost-cutting campaign.
“We will drastically restructure our business” to cope with tough market conditions at home and abroad, chief executive officer Kwon Oh-Joon said in a statement.
Posco has been struggling with a plunge in steel prices and tough competition with Chinese steel makers. It has already agreed to sell a 38-percent stake in its engineering unit to a Saudi Arabian fund for $1.1-billion.
Posco shares dropped 3.91 percent to 209 000 won on Wednesday.
AFP