South Korea’s largest steel producer Posco said Friday its operating profit in the first quarter posted 705.3 billion won ($570.8 million), down 41 percent on-year.

The company logged 14.5 trillion won in sales on a consolidated basis, decreasing by 1.4 trillion won on-year. Its net profit stood at 434.7 trillion won, down 44 percent on-year.

The COVID-19 pandemic outbreak has added difficulty to the sluggish steel industry, affecting exports and operations of overseas factories. According to the company, 10 of its overseas plants were shut down recently.

“The industry was struggling in the second half of last year, and the COVID-19 pandemic has worsened the difficult situation,” a Posco official said.

The steel industry faces bleak prospects, as demand for steel is likely to go down with the pandemic hitting the auto and construction industry as well.

“We will do our best to improve, cutting costs that are not related to productivity and reset investment priorities,” a Posco official said.

By Jo He-rim (herim@heraldcorp.com)