Posco Holdings, the South Korean steelmaker, reported a 57% decrease in net profit for the second quarter compared to the same period last year. Despite the decline, the company remains optimistic about its recovery after a profitable turnaround in the previous quarter.
In Q2, net profit stood at 776 billion Korean won ($603.1 million), down from KRW1.799 trillion a year ago, driven by weakened steel demand and prices following the post-pandemic peak. However, this reading fell short of the FactSet-compiled consensus forecast of KRW896.40 billion.
Revenue also experienced a 13% drop, reaching KRW20.121 trillion, while operating profit decreased by 38% to KRW1.326 trillion. These figures were in line with the company’s preliminary forecasts.
Posco announced plans to expand its steel production through low-carbon processing technology. It aims to produce 10.50 million tons of low-carbon products by 2030 and 1 million tons of steel plates used in drive motors for eco-friendly vehicles.
Market analysts have expressed optimism about Posco’s future prospects, particularly due to expectations of a potential rebound in steel demand later this year. Additionally, analysts have praised the company’s recent guidance for expanding its battery-materials business, recognizing its potential for growth.
Unlike its local competitors, Posco has an advantage in leveraging the lithium business as an additional growth engine. It plans to increase its annual lithium production to 423,000 tons by 2030, a 41% increase from its previous target. This move positions Posco as one of the world’s top three lithium producers.