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🇰🇷 South Korea /Energy & Infrastructure

POSCO Holdings Sees 24.5% Q1 Profit Jump Driven by Lithium Production and Battery Materials

From Hankyoreh · (5m ago) Korean Positive tone

Translated from Korean, summarized and contextualized by DistantNews.

TLDR

  • POSCO Holdings reported a 24.5% year-on-year increase in first-quarter operating profit, reaching 707 billion won, driven by improved performance in its secondary battery materials division.
  • The company's secondary battery materials unit significantly reduced its operating loss, with its lithium subsidiary in Argentina beginning commercial production and achieving monthly profitability.
  • While the steel division saw a profit decrease due to rising raw material costs, POSCO Holdings expects gradual improvement in the second half of the year, supported by new investments and strategic initiatives.

POSCO Holdings has announced a robust first-quarter performance, with operating profit surging by 24.5% to 707 billion won. This significant growth, detailed in their recent earnings report, is largely attributed to a substantial reduction in losses within the secondary battery materials sector. The company's strategic pivot towards future growth industries, particularly in materials for electric vehicle batteries, is clearly bearing fruit.

POSCO Argentina recorded its first monthly profit in March due to continuously increasing production volume and sales prices, and we expect the first quarterly profit in the second quarter.

— POSCO Holdings RepresentativeThe representative highlighted the positive performance of the lithium subsidiary in Argentina.

The performance of POSCO Argentina, the lithium subsidiary, is particularly noteworthy. Its commencement of commercial production marks a critical milestone, leading to a drastic reduction in the unit's operating loss and even achieving monthly profitability in March. This development is a testament to the company's successful investment in high-demand, future-oriented resources. Furthermore, POSCO Future M's increased operating profit, driven by expanded sales of cathode materials, reinforces the group's strong position in the secondary battery supply chain.

While the traditional steel business faced headwinds, including increased logistics and raw material costs exacerbated by geopolitical risks in the Middle East, the overall group performance remains strong. The company anticipates a gradual recovery in the steel sector from the second half of the year, contingent on the easing of geopolitical tensions. POSCO Holdings is also proactively managing its shareholder returns, announcing a new mid-term policy aimed at balancing investment in growth areas with returns to shareholders.

As geopolitical risks in the Middle East are resolved, profits are expected to gradually improve from the second half of the year, considering the time lag in cost reflection.

— POSCO Holdings RepresentativeThe representative discussed the outlook for the steel division.

Looking ahead, POSCO Holdings is making strategic investments, such as the upcoming operation of a new electric arc furnace in Gwangyang, designed to enhance its low-carbon steel production capabilities. The company's forward-looking approach, balancing core business strengths with aggressive expansion into new growth sectors like battery materials, positions it well for sustained growth and profitability in the evolving global market. The successful integration of these diverse business units under a unified strategy is a key factor in its continued success.

We plan to start operating at 5-10% capacity and gradually increase it according to demand increases.

— POSCO Holdings RepresentativeThe representative explained the plan for the new electric arc furnace in Gwangyang.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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