POSCO Holdings (005490) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue rose to KRW 18.51 trillion, up 2.5% sequentially, with operating profit up 29% to KRW 752 billion, driven by steel and infrastructure gains.

• Operating margin improved to 4.1%, while EBITDA reached KRW 1.76 trillion and EBITDA margin was 9.5%.

• Shareholder-friendly policies include immediate cancellation of treasury stock buybacks and a focus on long-term growth in rechargeable battery materials.

• Strategic restructuring of non-core assets is underway, with proceeds to be used for growth and shareholder returns.

• Enhanced ESG ratings, including an 'A' from MSCI ESG and top scores from ISS and Sustainalytics.

Financial highlights

• EBITDA for Q2 reached KRW 1.76 trillion, up KRW 201 billion from the previous quarter.

• Net debt to equity ratio improved to 15.9%, down 0.4 percentage points, with net borrowings decreasing by KRW 115 billion to KRW 9.75 trillion.

• Cash balance rose by KRW 1.03 trillion to KRW 18.91 trillion, with cash reserves of KRW 1.2 trillion maintained for risk management.

• CapEx for Q2 was KRW 2.6 trillion; cumulative CapEx to Q2 2024 reached KRW 4.4 trillion, with full-year CapEx being reduced by KRW 200 billion.

• Gross profit increased to KRW 1.5 trillion, gross margin at 8.1%, up 0.7 percentage points sequentially.

Outlook and guidance

• Steel production is expected to recover in Q3 as refurbishment projects conclude, with cautious optimism for further profit improvement.

• Full operation of key lithium and nickel plants targeted for 2025–2026, with ongoing ramp-up and certification processes.

• Restructuring of 120 non-core assets will continue through 2027, with temporary losses expected but long-term profit improvement anticipated.

• HYREX green steelmaking demo project aligned with government R&D, pending legislative approval in Q3 2025.

• Myanmar gas field expansion and Senex capacity projects progressing, with production and contract extensions through 2027.