POSCO Holdings (005490) Q3 2024 earnings summary

Executive summary

• Q3 revenue and operating profit remained stable compared to the previous quarter, despite challenging conditions in steel and battery materials markets.

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

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

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

• Net profit declined to KRW 497 billion from KRW 546 billion in Q2 2024.

Financial highlights

• Q3 2024 sales: KRW 18.32 trillion; operating income: 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: POSCO International's OP grew to KRW 357 billion, POSCO E&C's OP improved to KRW 47 billion.

• POSCO Future M saw a 64% drop in operating profit due to lower anode material sales and inventory losses; Q3 OP marginal at KRW 1 billion.

Outlook and guidance

• 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.

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

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

• Ongoing investment in lithium and battery materials projects to secure future growth.