S&P: Posco view to negative

Standard & Poor's said it revised to negative from stable the outlook on the A long-term corporate credit rating on Posco.

The agency also said it affirmed its long-term corporate credit and debt ratings on the company.

The outlook revision reflects Posco's weak financial profile, which may not improve over the next 12 months, S&P said.

The weaker financial profile is mainly a result of its aggressive strategy to pursue growth through geographical and business diversification, the agency said.

The company's financial profile weakened in 2010, mainly due to more than KRW 9.4 trillion in investments, including the acquisition of trading firm Daewoo International Corp. for KRW 3.4 trillion.

The ratings reflect the company's leading market position in Korea's steel industry, its strong cost competitiveness and solid profitability, S&P said.

The ratings also consider the company's exposure to the cyclical nature of the steel industry, its expansion strategy in overseas sectors and rising competition in the domestic market, the agency said.

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