Posco Holdings' Second-Quarter Net Profit Fell 57%

By Kwanwoo Jun

Posco Holdings' second-quarter net profit fell 57% from a year earlier but remained on track for recovery after a profit turnaround in the previous quarter.

Net profit was 776 billion Korean won ($603.1 million), down from KRW1.799 trillion in the same quarter a year earlier, when strong postpandemic steel demand and prices had sent earnings temporarily higher, the South Korean steelmaker said Monday.

The second-quarter reading missed a FactSet-compiled consensus forecast for net profit of KRW896.40 billion.

Revenue fell 13% to KRW20.121 trillion, while operating profit dropped 38% to KRW1.326 trillion.

Both revenue and operating profit largely matched the company's earlier preliminary forecasts.

Posco said Monday that it would expand its steel production based on low-carbon processing technology, unveiling its goal to produce 10.50 million tons of such low-carbon products by 2030.

The company also said it aims to produce 1 million tons of steel plates used in drive motors for eco-friendly vehicles.

Market analysts have been largely upbeat on Posco amid growing hopes that steel demand could bottom out later in the year. They have also been positive about the company's ambitious recent guidance for its battery-materials business expansion.

Eugene Investment & Securities analyst Lee Eu-gene said in a recent research note that Posco--unlike its local steelmaking peers--is well-equipped to grow its bottom line with an additional future-growth engine--the lithium business.

The company has said it aims to increase its annual lithium production to 423,000 tons by 2030, up 41% from its previous target, bidding to become one of the world's three largest lithium producers.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

July 23, 2023 23:28 ET (03:28 GMT)

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