POSCO Holdings (005490) Q3 2024 earnings summary

Executive summary

• Q3 2024 operating profit remained flat sequentially as steel and EV battery materials markets showed delayed recovery, with revenue at KRW 18.3 trillion and net profit at KRW 497 billion.

• Revenue for the first nine months of 2024 was ₩54.9 trillion, down from ₩77.1 trillion year-over-year, with operating profit at ₩2.08 trillion.

• High-end steel products contributed 32% of sales, supporting profit margins.

• Strategic alliance with JSW Group in India targets integrated steel mill, battery materials, and renewable energy collaboration.

• Ongoing restructuring of non-core and underperforming assets to enhance capital efficiency.

Financial highlights

• Q3 2024 revenue: KRW 18.3 trillion, down 1% sequentially; operating profit: KRW 743 billion; EBITDA: KRW 1.7 trillion; EBITDA margin 9.3%.

• Steel segment operating profit: KRW 466 billion, down KRW 331 billion from previous quarter.

• POSCO Steel posted KRW 438 billion operating profit, with improved results offset by weak Chinese subsidiary performance.

• Infrastructure segment operating profit: KRW 449 billion, up KRW 20 billion.

• POSCO Future M saw a 64% drop in operating profit due to lower anode material sales and inventory losses.

Outlook and guidance

• Steel and EV battery materials markets expected to recover gradually; focus on upstream expansion and cost competitiveness.

• Q4 raw material prices expected to decline further, with production and sales volumes to increase slightly.

• Profits in Q4 anticipated to be in line with Q3, with efforts to secure profits amid potential further price declines.

• Lithium production ramp-up and product certification ongoing; normalization of margins will take time due to fixed costs and low prices.

• Continued portfolio restructuring to improve capital efficiency, targeting 97% completion by 2026.