'1Q Slump' POSCO Holdings... "Focusing Capabilities on Steel and Secondary Battery Materials"

Q1 Sales and Operating Profit Both Decrease YoY
Business Strategy Directions to Enhance Competitiveness Unveiled
Discussion on Corporate Value Enhancement Measures Including Shareholder Returns

POSCO Holdings, which posted sluggish results in the first quarter of this year, has revealed a strategy to focus its capabilities and resources on the group's core businesses such as steel and secondary battery materials.

POSCO Holdings announced on the 25th that it recorded consolidated sales of 18.052 trillion KRW, operating profit of 583 billion KRW, and net profit of 619 billion KRW in the first quarter. Compared to the same period last year, sales and operating profit decreased by 6.9% and 17.3%, respectively. Compared to the previous quarter, sales decreased by 3.3%, while operating profit increased by 91.8%.

Regarding the increase in operating profit compared to the previous quarter, POSCO Holdings explained, "The steel and infrastructure sectors maintained operating profit levels similar to the previous quarter due to the ongoing economic recession, but the secondary battery materials segment included the effect of inventory revaluation reversal from the last quarter."

The consolidated financial targets for this year are planned at 78 trillion KRW in sales and an investment budget of 10.8 trillion KRW.

POSCO Building, Yeoksam-dong, Gangnam-gu, Seoul. Photo by Younghan Heo younghan@

Under the new vision of "Materials Opening the Future, Innovation Toward World-Class Excellence," POSCO Holdings announced a business strategy direction focusing resources and capabilities on the group's core steel and secondary battery materials businesses, as well as measures to enhance corporate value such as shareholder returns.

First, the goal is to strengthen global competitiveness in the steel business division. The POSCO Smart Factory, selected as Korea's first lighthouse factory in 2019, will be advanced to an Intelligent Factory by integrating artificial intelligence (AI), and through a transition to a low-carbon production system from an economic perspective, the company aims to secure manufacturing and cost competitiveness at a super-gap level.

In the secondary battery materials business, the plan is to actively utilize the adjustment period caused by the slowdown in the global electric vehicle market growth as an opportunity to strengthen core competitiveness.

First, in response to the decline in global raw material prices for secondary battery materials, the focus will be on securing high-quality resources such as lithium at the upstream stage to establish a foundation for long-term growth and profitability. The company will diversify business expansion methods through R&D-based innovative process development, strategic cooperation with customers, and acquisitions and mergers (M&A) of excellent companies, while focusing on early commercialization of next-generation materials such as all-solid-state batteries.

Reflecting the chasm of stagnant demand in the global electric vehicle market, investments in some businesses such as spent battery recycling will be decided at a reasonable time to strengthen the qualitative substance of the business strategy and maximize business performance when the market recovers.

Notably, this year marks the inaugural year of lithium production for the POSCO Group and the first year of full-scale operation of the electric vehicle battery full value chain. By the end of this year, with the operation of lithium, nickel, and precursor plants within the group, the full value chain of electric vehicle batteries?from raw materials and precursors to cathode and anode materials?will be completed.

Policies to enhance shareholder value and the government's corporate value-up program are also under review. POSCO Holdings has begun discussions at the board level regarding the introduction of the corporate value-up program and plans to actively promote measures to enhance corporate value, including treasury stock cancellation, within this year.