POSCO Inter 1Q Operating Profit 265.4 Billion KRW... 5% Decrease YoY

Good Performance in the Eco-friendly Materials Business Sector

POSCO International's operating profit in the first quarter of this year decreased by about 5% compared to the same period last year. Despite the global contraction in upstream industries, the company managed to perform well by achieving results in the eco-friendly materials business.

POSCO International announced on the 25th that it recorded sales of 7.7605 trillion KRW and an operating profit of 265.4 billion KRW in the first quarter of this year. These figures represent decreases of 6.6% and 5.1%, respectively, compared to the same period last year. However, the operating profit exceeded the market consensus forecast of 245.7 billion KRW by about 8%.

POSCO International cited the stable profit structure created by the liquefied natural gas (LNG) value chain in the energy business and the achievements in the eco-friendly materials business as the reasons behind the solid performance.

First, in the energy business, the upstream gas field business maintained natural gas sales, achieving an operating profit of approximately 64 billion KRW, similar to the previous quarter. In the midstream LNG terminal sector, sales reached 26.9 billion KRW by increasing import volumes when LNG prices were low through expanded storage capacity and optimized operations. In the downstream LNG power generation sector, operating profit rose 11.5% year-on-year to 60 billion KRW by securing competitive fuel import prices.

POSCO International plans to invest 3.6 trillion KRW by 2026 to increase gas field production, explore new blocks, and double the size of terminals.

In the materials business, achievements in the eco-friendly materials sector stood out amid the steel industry downturn. In particular, exports of API steel (steel for oil and gas pipelines) to the U.S. and strong sales of high-strength steel sheets used in electric vehicles contributed to an operating profit of 78.9 billion KRW. Despite the sluggish upstream industry, sales volume of the drive motor core business increased by 6.3% domestically and 22% overseas compared to the same period last year. The permanent magnets ordered earlier this year through overseas subsidiaries in North America and Europe will use rare earth elements sourced from the U.S., Australia, and Vietnam.

Meanwhile, POSCO International's borrowings in the first quarter amounted to 5.9097 trillion KRW, and the net debt ratio was 73.1%, decreasing by 549 billion KRW and 8.5 percentage points, respectively, compared to the same period last year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) reached 400 billion KRW, securing investment resources.

A POSCO International official stated, "If the introduction of interim dividends announced last January is finally approved, shareholders as of June 30 will be eligible to receive interim dividends according to the articles of incorporation," adding, "We will actively work to enhance shareholder value based on steady profit generation."