Q2 Earnings Conference Call
Revenue 20.1 Trillion KRW · Operating Profit 1.3 Trillion KRW
POSCO Group Chairman Choi Jung-woo visited the construction site of the POSCO Future M cathode material plant located in Quebec, Canada, on the 21st of last month (local time) and took a commemorative photo with employees. Photo by POSCO Holdings
POSCO Holdings recovered from the damage caused by Typhoon 'Hinnamnor' last September and regained a quarterly operating profit of 1 trillion KRW. POSCO Holdings plans to make large-scale investments exceeding 120 trillion KRW in domestic and overseas businesses by 2030, focusing on battery materials.
On the 24th, POSCO Holdings announced through a conference call on its earnings that it recorded consolidated sales of 20.121 trillion KRW and an operating profit of 1.326 trillion KRW in the second quarter. Compared to the previous quarter, sales increased by 3.8%, and operating profit surged significantly by 88.1%. Compared to the same period last year, sales and operating profit decreased by 12.6% and 36.9%, respectively, but still exceeded the average quarterly performance since 2020. Jeong Gi-seop, Chief Strategy Officer (CSO) of POSCO Holdings, said during the conference call, "The steel division, which had difficulties due to flooding, quickly recovered to a quarterly operating profit of 1 trillion KRW." He added, "The recovery of profits in the core steel business is important," and said, "By maintaining global competitiveness and generating stable profits, while working in tandem with new business growth strategies, we can create a virtuous cycle that enhances corporate value."
Earlier, POSCO Holdings presented plans to make large-scale investments centered on steel and battery materials over the next seven years. On the 11th, during the 'Secondary Battery Materials Business Value Day,' the company announced a goal to achieve sales of 62 trillion KRW by 2030 with a production system of 420,000 tons of lithium, 240,000 tons of nickel, 1 million tons of cathode materials, and 370,000 tons of anode materials. The investment scale amounts to 121 trillion KRW.
Jeong Dae-hyun, head of POSCO Holdings' management strategy team, stated, "We plan to focus investments on three areas: steel, battery materials, and eco-friendly sectors," adding, "By 2030, we plan to allocate 35% to steel, 46% to battery materials, and the remainder to eco-friendly sectors." He further noted, "Among the battery materials investments, 70% will be in lithium and cathode materials."
In particular, the lithium production target was increased from the previous 300,000 tons to 420,000 tons. The goal is to secure a global top 3 position in the lithium sector by 2030. Lee Kyung-seop, head of POSCO Holdings' secondary battery materials business team, said, "Lithium prices this year and next are expected to be in the range of 40,000 to 50,000 USD," adding, "In the mid to long term, prices are expected to stabilize around 30,000 USD by 2030." He continued, "Demand for electric vehicles continues to grow, and as we pursue the lithium business, we have confidence in this field both technically and commercially," emphasizing, "This is not a vague goal but a concrete plan based on ongoing projects."
Lithium supply and demand instability is increasingly likely as years go by. There are limited large-scale lithium salt lakes available for additional extraction in Argentina, Chile, Bolivia, where brine lithium is concentrated. These countries are nationalizing lithium businesses, and lithium salt lakes with high profitability have already sold mining rights to countries like China. Lee said, "High-quality salt lakes available in Argentina are depleted, and Bolivia and Chile have nationalized new lithium mining rights," adding, "We plan to expand our business focusing on ore lithium in Australia and North America, as well as unconventional lithium (clay lithium)." The POSCO Group has already prepared various lithium procurement plans, including Australian lithium mines and the Ombre Muerto salt lake in Argentina. Stabilizing lithium supply can further highlight the value of the company as a battery materials enterprise.
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