Posco Holdings has announced that it achieved weaker-than-expected financial results in 2023, recording a consolidated operating profit of 3.5 trillion won ($2.6 billion). This decrease of 27.2% compared to the previous year falls below market expectations, according to data collected by FnGuide.
Turnover declined by 9% compared to the previous year, reaching 77.1 trillion won, which is in line with market expectations. Net profit dropped by 48.2% to 1.8 trillion won, deviating from analyst estimates of 2.6 trillion won. The consolidated financial results also include the results of Posco’s subsidiaries, Posco Future M and Posco International.
These reports are the result of unstable steel prices and “declining raw material prices, such as lithium, due to the slowdown in the electric vehicle market,” said Jeong Ki-seop, head of business strategy at Posco Holdings, during a conference call on Wednesday afternoon. Steel manufacturing companies reported an operating profit of 2.6 trillion won, a 21% decrease compared to the previous year, while sales fell by 10.1% to 63.5 trillion won. Posco Future M, a subsidiary of Posco Holdings specializing in battery materials for electric vehicles, achieved an operating profit of 36 billion won last year, a 78% decrease compared to the previous year, while sales increased by 44% to 4.7 trillion won. Posco Future M reported an operating loss of 74 billion won only in the fourth quarter, compared to 1.1 trillion won in the same period the previous year. The average price of lithium carbonate, a key battery component, was 86.5 yuan ($12.10) per kilogram (2.2 pounds) in January, an 81% decrease compared to the previous year.
According to Jeong:
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Posco Future M plans to return to profitability this year, although the overall electric vehicle market is expected to experience a slowdown that could last until next year.
Posco International, an energy-focused division, reported an operating profit of 1.16 trillion won last year, a 28.9% increase compared to the previous year. Its annual revenues decreased by 12.8% to 33.1 trillion won. Posco Holdings shares fell 0.6% to 426,000 won on Wednesday.
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The source of the article is from the blog regiozottegem.be