Posco Future M (A003670) Q2 2024 earnings summary

Executive summary

• Sales declined quarter-over-quarter due to sluggish N65 sales, despite strong Hi-Ni cathode deliveries, with profitability impacted by AG valuation loss and repair costs in the Lime business.

• Net profit turned negative in 2Q24, with a net loss of KRW 11.2bn compared to a profit of KRW 57bn in 1Q24 and KRW 43.1bn in 2Q23.

Financial highlights

• Revenue for 2Q24 was KRW 915.5bn, down KRW 222.9bn quarter-over-quarter and KRW 277.5bn year-over-year.

• Operating profit dropped to KRW 2.7bn, with an operating margin of 0.3%, down from 3.3% in 1Q24 and 4.4% in 2Q23.

• EBITDA for 2Q24 was KRW 47.7bn, down KRW 29.5bn quarter-over-quarter and KRW 38.4bn year-over-year.

• COGS decreased to KRW 852.8bn, reflecting lower sales volumes.

Outlook and guidance

• Lithium prices are expected to remain flat in 3Q24 due to subdued spot demand, with potential fluctuations as EV demand remains volatile.

• Nickel prices may weaken early in 3Q24 but could gradually rise if US interest rates are cut.