POSCO, South Korea’s top steelmaker, reported Tuesday a drop in profit in the first quarter of this year, adding to signs of stress in the steel industry and disruption from the prosecution’s slush fund probe.

POSCO posted 731 billion won ($675 million) in operating profit during the period, a slight 0.04 percent decline from the 731.3 billion won reported last year.

The figure compares to market expectations that it would record at least 849 billion won in profit, the largest first quarter profit in four years, after reporting 1.35 trillion won in 2011.

Local finance research agency FnGuide forecast POSCO would record 849 billion won in operating profit, a 16.1 percent increase from the same period last year. Meanwhile, Korea Investment and Securities expected an operating profit of 862 billion won.

Sales were down 2.2 percent on-year to 15.1 trillion won, affected by weak market conditions in overseas construction and steal businesses, the company said.

(monicasuk@heraldcorp.com)