November 27, 2024

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Posco Holdings, the holding company of South Korea's top steelmaker Posco, said Monday that its operating profit in the second quarter reached 1.3 trillion won ($1.03 billion), recovering from a sluggish performance in the previous quarter this year.

It is also the first time for the company's operating profit to surpass 1 trillion won since the second quarter of last year, the company added.

During the three-month period, the company’s sales reached 20.1 trillion won, also up from the previous quarter’s 19.3 trillion won.

Compared to the second quarter last year, the company’s sales went down by 12.6 percent, while its operating profit decreased by 36 percent on-year.

“The company’s sales and operating profit decreased compared to the second quarter last year when the steel industry boomed, which subsequently led to an increase in steel prices. But, the latest earnings are still above average quarterly earnings since 2020,” Posco Holdings said.

Posco Holdings said its operating profit recovered in the second quarter mainly as its steelmaking arm's performance improved.

In the first quarter, Posco Holdings’ operating profit came to 705 billion won, as Posco’s operating profit plunged to 251 billion won. But in the second quarter, the steelmaker’s operating profit jumped to 841 billion won.

During an earnings call held on Monday, Posco Holdings said its steelmaking arm's performance could improve further in the second half of this year as steel prices are likely to go up. Depending on China’s economic recovery, Posco’s earnings could also climb, it added.

Posco International, Posco Holding's trading arm, also posted an all-time high operating profit of 357 billion won in the April-June period, up from 280 billion won in the first quarter.

Posco International said its energy business contributed to the company’s record-high operating profit. In the second quarter last year, the energy business’ sales came to 981 billion won, with an operating profit of 208 billion won.

Meanwhile, Posco Holdings reiterated some of its business plans relating to its major businesses during the earnings call on Monday. The company said it will increase the proportion of low-carbon steel sales to 10.5 million metric tons.

The company added it plans to increase production capacity of an automotive steel product optimized for electric vehicles to 1 million tons by 2030, in line with increasing demand for EVs in the global market.

In terms of lithium production, Posco Holdings said the company is continuing discussions with lithium miners in Australia and North America. Earlier this month, Posco Holdings said it aims to be among top 3 global lithium companies by 2030, with a production capacity of 420,000 tons.

By Shim Woo-hyun (ws@heraldcorp.com)