[News Article] Posco Holdings' Q2 profit beats expectations on steelmaking recovery
Posco Holdings' Q2
profit beats expectations on steelmaking recovery
SARAH CHEA, Korea JoongAng Daily - Posco Holdings reported a consensus-beating
1.3 trillion won ($1 billion) in consolidated operating profit in the second
quarter as the steelmaking business slowly recovers after the shutdown of
Posco's Pohang steel mill last year.
quarterly operating profit came in at 1.33 trillion won, down 38.1 percent on
year, beating market expectations of 1.2 trillion won compiled by market
quarter, the operating profit is up by 86 percent as it resumed full operations
at its Pohang factory on Jan. 20, exactly 135 days after it was shut down on
Sept. 7 due to flooding caused by Typhoon Hinnamnor.
fell 12.6 percent on year to 20.1 trillion won during the same period, in line
with analyst expectations of 20.7 trillion won.
profit was also in line with the consensus of 800 billion won, down 55.6
percent on year.
consolidated earnings include those of its subsidiaries, which include steelmaker
Posco, Posco Future M and Posco International.
typhoon-hit steelmaker Posco recovered the 1 trillion won level as sales
normalized starting in the second quarter," Jeong Ki-seop, chief strategy
officer at Posco Holdings, said during a conference call Monday morning.
"The recovery of our key business is very significant."
generated 841 billion won in operating profit during the April-to-June period,
down 36.4 percent on year. On quarter, it is up by 235 percent.
subsidiaries also reported strong results in the second quarter.
Future M generated 52.1 billion won in operating profit, down 5.6 percent on
year due to increased expenses on the newly opened cathode factory in
Gwangyang, South Jeolla.
recorded an all-time high of 1.2 trillion won, up 48.5 percent on year.
profit of battery material businesses skyrocketed 124.6 percent on year to 37.5
billion won during the same period. Sales of cathodes grew 10.4 percent to
786.3 billion won. Cathodes are the major materials in making EV batteries that
make up 40 percent of the total battery cost.
Future M won orders of 106 trillion won so far from various major battery
makers including Samsung SDI, LG Energy Solution and Ultium Cells.
Holdings will pour 46 percent of our total investments into the secondary
battery business over the next three years," said Jeong.
"Profitability will kick into high gear starting in 2026."
Future M aims to increase its cathode production capacity to 1 million tons and
anode to 360,000 tons by 2030.
International, a trading company, generated an all-time high of 357.2 billion
won in operating profit, up 28 percent on year. Posco International merged with
Posco Energy on Jan. 1.
Holdings shares surged 16.5 percent to close at 642,000 won Monday, becoming
Korea's fourth largest company in terms of market capitalization after Samsung
Electronics, LG Energy Solution and SK hynix.