POSCO Holdings Inc. Q4 FY2024 earnings call

• Restructured low-performing businesses and non-essential assets, generating KRW662.5 billion cash, with KRW100 billion used for treasury share buyback.
• Made progress in low-carbon steel with investments in electric furnaces and pilot electric smelter facility. In Energy Materials, built systems for producing lithium and cathode active materials, completed plants in Argentina and others in 2024.
• Pursued JV upstream investment in India with JSW, and continued efforts to enhance asset efficiency through business restructuring.

In 2024, POSCO Holdings had consolidated account revenue of KRW72.7 trillion and operating profit of KRW2.2 trillion, both down from the previous year. For the Steel segment, China's oversupply and construction recession in the region impacted steel prices, but POSCO Group maintained relatively stable profits with value-add steel products. The Energy Materials business recorded KRW278 billion losses due to low EV market growth, inventory valuation losses from new plants, and high initial operation costs. The Infrastructure segment saw operating profit decline 14% Y-o-Y due to additional costs from large-scale projects. Steel contributed a significant portion to revenue, while Energy Materials had a substantial loss contribution.

• 2025 business environment expected to be rough; focus on sustaining strong profits. In Steel, drive overseas growth and carbon neutrality, enhance facility capacity and efficiency. In Energy Materials, proactively acquire quality lithium assets and ramp up new plants ahead of schedule. In Infrastructure, continue investments in Australia and Myanmar to expand capacity and strengthen energy business foundation.

• Higher trade barriers globally.
• Slowdown in EV market growth.
• High initial operation costs and low plant operation rates during product certification for new Energy Materials plants.
• Market volatility affecting steel and energy materials prices.

Q: About POSCO Future M's fourth quarter red ink, production cost adjustment, and POSCO Argentina's shift to black ink.

A: POSCO Future M's red ink due to high initial costs of new plants. Production cost adjustments addressed in projects, with issues in specific plant projects expected to resolve next year. POSCO Argentina's plant needs 80%+ operation rate and higher lithium prices to shift to black ink, likely next year.