POSCO Holdings Inc.'s Q3 operating profit jumps 48% year on year ... Steel recovery brings cheer

[Financial News] POSCO Holdings Inc., the holding company of POSCO Group, significantly improved profitability, lifting operating profit by about 48% year on year in the third quarter of this year. The steel division led strong results as production rose and cost burdens eased. However, the battery materials business swung to a loss from the previous quarter amid weak performance at its lithium subsidiaries.
POSCO Holdings Inc. said on the 2nd that it posted consolidated revenue of 19.141 trillion won and operating profit of 945 billion won in the third quarter of this year. Revenue rose 10.9% and operating profit 47.9% from the same period a year earlier.
The steel business was at the center of the improved results. Combined operating profit for the steel division rose by 163 billion won from the previous quarter to 566 billion won. On a standalone basis, POSCO posted revenue of 9.957 trillion won and operating profit of 455 billion won, up 5.8% and 66.1%, respectively, from the previous quarter.
Despite rising coking coal prices, higher steel selling prices, increased production and sales volumes, and cost cuts were seen as supporting profitability. POSCO's carbon steel selling price rose from 962,000 won per ton in the second quarter to 982,000 won in the third quarter. Product sales volume also increased from 8.357 million tons to 8.559 million tons. With logistics costs and other expenses also falling, POSCO's operating margin recovered from 2.9% to 4.6%.
Combined operating profit for the infrastructure division held at a similar level to the previous quarter, at 495 billion won. POSCO International posted revenue of 9.027 trillion won and operating profit of 401 billion won. Operating profit declined from the previous quarter but rose 24.1% year on year. Higher natural gas production at Australia's Senex and increased output from its palm business in Indonesia also contributed. POSCO E&C, meanwhile, posted operating profit of 48 billion won, up from the previous quarter, through profitability-focused business management.
The battery materials division posted a combined operating loss of 17 billion won, swinging to a loss from a profit of 41 billion won in the previous quarter. POSCO Future M's performance improved, but losses at its lithium subsidiaries weighed on results.
POSCO Future M posted revenue of 835 billion won and operating profit of 82 billion won, aided by increased sales of cathode and anode materials and higher cathode material selling prices. Operating profit rose by 55 billion won from the previous quarter. POSCO Argentina, by contrast, recorded an operating loss of 18 billion won due to severe local cold, temporary production cuts for major equipment repairs, and falling lithium prices, among other factors. At Posco Pilbara Lithium Solution, the operating loss widened to 67 billion won as the burden of ore feedstock costs remaining high relative to selling prices continued.
POSCO Holdings Inc. plans to continue investing in future growth businesses and steadily enhance the competitiveness of its key businesses.
POSCO is investing 480 billion won to build an automotive galvanized steel sheet plant in Gwangyang with annual capacity of 450,000 tons. POSCO Future M plans to convert some of its existing ternary cathode material facilities to produce lithium iron phosphate (LFP) materials and establish a mass-production system with annual capacity of around 50,000 tons early next year. Last month, it completed Argentina's second lithium plant, and aims to expand local lithium production capacity to 100,000 tons per year by 2033.

[email protected] Jung Won-il Reporter