2024 Sales at KRW 3.7 Trillion, Operating Profit at KRW 700 Million
Chasm Crisis... "Entering Emergency Management System"
POSCO Future M announced its 2024 business performance with consolidated sales of KRW 3.6999 trillion and an operating profit of KRW 700 million. Sales decreased by 22.3% compared to the previous year, and operating profit dropped by 98.0%. The net loss for the period was recorded at KRW 231.3 billion. This is the result of the domestic battery industry struggling amid the electric vehicle 'Chasm (temporary demand stagnation)' and failing to secure profitability for key products.
According to the business performance announced by POSCO Future M on the 3rd, the battery materials business recorded sales of KRW 2.3399 trillion and an operating loss of KRW 36.9 billion. The cathode materials business saw a slight increase in sales volume compared to the previous year, centered on high-value-added high-nickel products, due to the increase in global electric vehicle sales. However, sales prices dropped significantly due to the decline in major raw material prices such as lithium and nickel, resulting in sales of KRW 2.1856 trillion, down 30.4% year-on-year. Profitability also declined due to a valuation loss of KRW 43.6 billion on some products and raw material obsolete inventory.
The anode materials business experienced a decrease in sales volume in the natural graphite anode segment due to the onslaught of low-priced Chinese products. Sales prices also fell due to the decline in the price of graphite, the raw material. The synthetic graphite anode segment also reflected inventory valuation losses due to high manufacturing costs during the initial operation phase, resulting in sales of KRW 154.3 billion, down 30.4% year-on-year, and operating profit turned to a loss. The basic materials business recorded sales of KRW 1.36 trillion and an operating profit of KRW 37.6 billion.
Meanwhile, POSCO Future M is entering an emergency management system to prepare for growth after the chasm. Previously, U.S. President Donald Trump announced a 25% tariff on imports from Canada and Mexico, and the affected countries are retaliating. POSCO Future M is constructing a battery cathode materials joint venture factory in Canada with General Motors (GM). POSCO Future M announced its plan to secure business competitiveness through proactive crisis response.
President Um Gi-cheon shared the emergency management plan with all executives immediately after the company operation meeting on the 17th of last month and reaffirmed the commitment to strengthen manufacturing and business competitiveness and overcome the crisis. At this meeting, President Um reportedly urged, "Focus on strengthening manufacturing competitiveness and securing innovative operational capabilities, continuously review investment projects to prepare for the company's future, and boldly adjust non-core assets. Company management should thoroughly review key management tasks from the perspective of securing profitability."
Meanwhile, POSCO Future M plans to diversify its product portfolio by strengthening research and development along with productivity innovation. In addition to premium high-nickel cathode materials, the company plans to develop high-value-added products to capture the global market. POSCO Future M is also actively collaborating with POSCO Holdings Future Technology Research Institute, Pohang Institute of Industrial Science and Technology, and POSTECH to develop next-generation battery materials that will lead the future market.
In particular, POSCO Future M is proactively responding to customer demand by advancing the development of not only cathode materials for all-solid-state batteries, which are attracting attention as game changers in the future battery industry, but also cathode materials for dry electrodes and lithium metal anodes. For cathode materials for all-solid-state batteries, tests are being conducted with more than three domestic and overseas customers aiming for mass production in 2028. Tests with customers are also underway for cathode materials for dry electrodes and lithium metal anodes, targeting mass production in 2028.
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