POSCO Holdings (005490) Q4 2024 earnings summary

Executive summary

• Consolidated revenue for 2024 was KRW 72.7 trillion, with operating profit at KRW 2.2 trillion, both declining year-over-year due to steel market headwinds and energy material price drops.

• Non-cash losses of KRW 1.3 trillion were recognized, mainly from asset impairments and inventory valuation losses.

• Portfolio restructuring and divestment of non-core assets generated KRW 662.5 billion in cash, with further restructuring planned for 2025.

• Steel prices in Asia remained suppressed due to China's oversupply and construction recession, while energy materials suffered from slow EV market growth and inventory value impairments.

• Despite challenges, new EV battery material plants were completed and progress made in core strategies, including overseas investment and electric furnace construction.

Financial highlights

• EBITDA for 2024 was KRW 6.1 trillion; yearly CapEx reached KRW 9 trillion.

• Q4 operating profit was weak at KRW 95 billion, with a net loss of KRW 703 billion due to KRW 1.3 trillion in non-cash expenses.

• Steel operating profit declined 35% year-over-year; OP margin dropped by 3.9%, and profit decreased 29% year-over-year.

• Net debt increased to KRW 11.2 trillion, with net debt to equity rising to 18.2% from 13.5% year-over-year.

• Cash balance at year-end was KRW 14.8 trillion, down KRW 3.1 trillion from 2023.

Outlook and guidance

• 2025 operating profit is expected to be slightly better than 2024, though no significant expansion is anticipated.

• CapEx for 2025 will be slightly lower than 2024, with continued investment in lithium and selective focus on quality investments.

• Steel output in 2025 is expected to remain flat or slightly lower due to refurbishment and fire-related downtime.

• Cathode material sales are expected to grow by more than 30% in 2025 as ramp-up for new high-nickel clients completes.

• Targeting additional KRW 1.5 trillion in cash generation through further restructuring in 2025.