Korean Posco's profits down 66%

South Korea's Posco, the world's fourth-largest steelmaker by output, on Tuesday posted a 66 percent drop in second-quarter net profit due to high raw material costs and weak global demand. Consolidated net profit in April-June period plunged to 466 billion won ($406 million) from 1.37 trillion won a year earlier. Operating profit fell 39 percent year-on-year to 1.065 trillion won. Sales were down 3.3 percent to 16.49 trillion won. The company has cut prices due to slowing demand amid global economic turmoil and instituted aggressive cost controls. It predicted steel demand would recover in the third quarter. "We will tighten our belt as much as possible in the third quarter to cope with a possible crisis because of growing uncertainties at home and abroad," it said in a statement. Posco said it would sell off some unnecessary assets to streamline it business line-up. Executive Vice President Lee Young-Hoon told Dow Jones Newswires that his company plans this year to sell more than 10 affiliates that have been restructured or are too expensive. Posco said it achieved 612.9 billion won in cost cuts in the second half, or 57 percent of its annual target of 1.07 trillion won. It targets 70.4 trillion won in total sales this year, up from 68.94 trillion won last year.