POSCO Holdings (005490) Q2 2025 earnings summary

Executive summary

• Consolidated revenue for Q2 2025 reached KRW 17.6 trillion, with operating profit at KRW 610 billion and a 5.7% margin, marking two consecutive quarters of growth after a previous low point.

• Steel segment saw improved sales volumes and margins due to lower raw material costs and efficiency gains, while rechargeable battery materials (RBM) faced increased deficits from ramp-up costs and falling lithium prices.

• Portfolio management achieved a 45% progress rate, generating KRW 1 trillion in cash from 56 completed projects since 2024, with ongoing restructuring of non-core and underperforming assets.

• Net profit dropped to KRW 84 billion, mainly due to non-operating losses including FX and asset impairment.

• POSCO International delivered robust infrastructure performance, while POSCO E&C's overseas projects incurred additional costs.

Financial highlights

• EBITDA for Q2 was KRW 1.63 trillion; first half cumulative CAPEX was KRW 3.1 trillion.

• Net debt decreased by KRW 770 billion to KRW 10.9 trillion, with improved net debt to equity ratio at 18.0%.

• Steel operating margin increased 35.6% quarter-on-quarter to KRW 610 billion; OP margin rose from 3.9% to 5.7%.

• EPS fell to KRW 1,975 from KRW 3,735 in the previous quarter.

• Gross margin improved to 7.9% from 7.7% sequentially.

Outlook and guidance

• Optimism for sustaining current steel profit levels into Q3, supported by ongoing efficiency projects and cost-cutting measures.

• Targeting consolidation of 47 additional assets in 2H 2025 to generate KRW 1 trillion in cash, aiming for a cumulative KRW 2 trillion by year-end.

• Lithium business expected to benefit from market rebound, with prices projected to rise above $9 in the latter part of the year and potentially exceed $10 by 2026.

• Continued focus on cost innovation, digital transformation, and high-value product development to enhance competitiveness.

• Steel sales volume in the second half is expected to surpass the first half, aided by the restart of the FINEX number three line.