Posco Holdings posts W819b operating profit in Q2, lifted by lithium and LNG

Steel held its ground while lithium and LNG drove an earnings rebound. Posco Holdings posted strong second-quarter results, buoyed by the first quarterly operating profit from its Argentina lithium business and a record operating profit at Posco International.

Posco Holdings disclosed Thursday that it recorded consolidated sales of 19.26 trillion won ($13.3 billion) and operating profit of 819 billion won in the second quarter.

Sales rose 9.7% and operating profit climbed 34.9% from the same period last year. Net profit for the period jumped 808.0% year-on-year to 761 billion won.

Compared with the first quarter, sales grew 7.7% and operating profit increased 15.9%. The operating margin rose 0.3 percentage points, from 4.0% in the first quarter to 4.3% in the second, as earnings improved across all major business segments — steel, battery materials and infrastructure.

In the steel segment, Posco recorded standalone sales of 9.41 trillion won and operating profit of 274 billion won in the second quarter. Sales rose 468 billion won, or 5.2%, from the same period last year, though operating profit fell 239 billion won, or 46.6%.

Compared with the first quarter, however, sales increased 5.4% and operating profit grew 28.5%.

Higher oil and raw material prices weighed on costs, but product price increases and stronger sales volumes offset the pressure. The average selling price of Posco's carbon steel products rose 42,000 won per ton, from 920,000 won in the first quarter to 962,000 won in the second. Sales volumes also increased by 720,000 tons over the same period.

The battery materials segment also moved out of the red. Posco Future M posted second-quarter sales of 679.5 billion won and operating profit of 26.7 billion won — a 3,512% year-on-year increase in operating profit on sales that edged up 2.8%.

Inventory revaluation gains on some cathode material products and a recovery in anode material sales to key customers drove the improvement. The energy materials business swung to an operating profit of 3 billion won in the second quarter from an operating loss of 1 billion won in the first.

Posco Argentina recorded its first-ever quarterly operating profit, aided by the stabilization of operations and equipment improvements at its brine lithium Plant 1. Sales rose 80 billion won from the previous quarter to 108 billion won, and operating profit came in at 11 billion won — a turnaround after operating losses of 58 billion won in the second quarter of last year and 18 billion won in the first quarter of this year.

Posco Pilbara Lithium Solution also narrowed its operating loss from 3 billion won in the first quarter to 1 billion won in the second, helped by expanded sales and higher lithium prices. Posco HY Clean Metal, which handles spent battery recycling, posted operating profit of 3 billion won on the back of high utilization rates and cost reductions.

Within the infrastructure segment, Posco International stood out with a sharp earnings improvement. The company posted second-quarter sales of 9.62 trillion won, operating profit of 429 billion won and net profit of 247.3 billion won.

Compared with the same period last year, sales rose 18.4%, operating profit grew 26.9% and net profit surged 173.3%.

Operating profit beat the market consensus of 376.1 billion won by 14.1%, setting a new all-time quarterly record. Sales also rose 1.21 trillion won and operating profit increased 71 billion won from the previous quarter.

Higher gas prices at the Myanmar gas field and the capacity scale-up at the Australian Senex gas field drove the results. The Indonesia palm oil business also contributed to profit growth as output recovered from weather-related disruptions in the first quarter. LNG trading and the US trading subsidiary also improved profitability.

Posco E&C posted second-quarter sales of 1.77 trillion won and operating profit of 44 billion won. Despite revenue growth and improved earnings in the construction business, operating profit fell 9 billion won from the previous quarter as additional cost provisions were recognized in the plant business. The company secured 4.9 trillion won in new orders in the second quarter, centered on Greater Seoul redevelopment projects and a terminal project in Thailand.

Posco Holdings is also pressing ahead with the disposal of non-core assets. The company generated 475.4 billion won in cash through 12 restructuring transactions in the first half of this year. Since 2024, cumulative restructuring activity has reached 85 transactions, generating 2.2 trillion won in cash.

The group raised its restructuring targets, from 128 transactions and 2.8 trillion won in cash by 2027 to 129 transactions and 3.5 trillion won by 2028. It plans to complete an additional 44 transactions from the second half of this year through 2028, generating 1.3 trillion won.

Going forward, Posco Holdings will pursue its "Triple Core" strategy, built around three growth pillars: industrial resources centered on steel; strategic resources including lithium, rare earths and rare gases; and energy resources led by LNG. The group aims to diversify its earnings structure on the back of improved profitability in the lithium business and continued growth in Posco International's energy operations.