POSCO Holdings Inc. Q1 FY2026 earnings call

• Strategic shift in steel business: finalized divestment of PDSS China subsidiary, retired 2FINEX; world's largest new 2.5 million ton capacity electrical furnace to operate from June, 300,000 ton capacity demo plant for Hyrex technology broken ground, acquired government permits for Pohang Hyrex plant site; integrated steelworks project in Odisha, India progressing with JV agreement signed. - Lithium subsidiaries: POSCO Argentina entering commercial production phase, operating rate risen, long-term supply agreement with SK On signed; phase two construction progressing; Post-COHIBAR LUTEM solution losses reduced; Australia mineral resources joint venture in progress; Postco tri-clean metal recorded first quarterly profit. - Shareholder return policy: third interim shareholder return policy to go into effect, aiming for 35% - 40% shareholder return ratio based on net income, using blended mix of cash dividends and share buyback and cancellations.

Consolidated revenue was $17.9 trillion with operating profit of $710 billion. Rechargeable battery materials: lithium prices rose, Pasco, Argentina plant operation ramped up, March recorded first monthly profit, second quarter expected to have first quarterly profit. Steel: volume growth in sales but FX and raw material costs squeezed profit, improved performance in overseas subsidiaries, anticipate gradual profit gains in second half. Infrastructure: POSCO International steel exports climbed, gas and energy sectors demand recovered; POSCO E&C recovered from last year's accidents to black ink. SEAL business: profit increased $91 billion, margins under pressure but overall profit slightly increased. Rechargeable battery materials: losses narrowed significantly, improvement due to higher operating rate at Argentina lithium plant and rebound in lithium prices. Infrastructure and profits: increased around $415 billion QOQ, POSCO International had solid profit growth, POSCO E&C turned to profit.

• Rechargeable battery materials: strong performance in first quarter expected to continue, second quarter anticipate Pasco, Argentina's first quarterly profit. - Steel: once geopolitical risk in Middle East subsides and input costs come down, anticipate gradual profit gains starting in second half. - Infrastructure: POSCO E&C expects to maintain profitability level. - Lithium business: phase one and two combined expected to turn to profits this year. - India JV: project to be completed by 2031, plant to be operational by 2032.

• In steel business, rise in FX causes higher raw material costs squeezing profit. - For Post-COHIBAR LUTEM solution, if raw material costs go up, spreads will squeeze and pose burden in short term. - Australia mineral resources joint venture subject to merger control procedures, timing of joint venture establishment uncertain. - Impact of Iran war on FX, oil price hikes, LNG price hikes affecting input costs for POSCO.

Q: Regarding JV agreements in India, what happens to PMH exports after JV goes into effect; Q: SEAL market outlook, hot roll and cold roll price projections; Q: Iran situation impact on business; Q: Lithium business profit factors and POSCO Future M operating profit projection; Q: Subcontractor direct employment impact on SG&A cost; Q: Overseas investments like Cleveland Cliffs and Wyala Steelworks timelines and Hirex investment areas; Q: Lithium business earnings improvement details and phase two impact; Q: Lithium demand projection, deficit to profit turn around, CATL's sodium ion battery impact; Q: India JV competitive edge and EAF operation additional costs.

A: For JV exports, up until JV effect hot roll exports continue, initially supply non-automotive steel; SEAL market hot roll price likely to hold, cold roll price impacted by hot roll and anti-dumping cases; Iran war impacts POSCO via FX, oil and LNG price hikes, POSCO International and Future M partially offset losses; Lithium business profit improvement due to utilization rate hike and lithium price rebound, POSCO Future M operating profit projected; Subcontractor direct employment may cause slight SG&A cost increase but enhance work efficiency; Cleveland Cliffs MOU negotiation ongoing, Wyala Steelworks under Australian government supervision, Hirex investment includes facilities transition and hydrogen related costs; Lithium business earnings improvement due to utilization and price, phase two depreciation reflected from October; Lithium demand shortage, deficit to profit turn around uncertain, CATL's sodium ion battery impacts LFP market; India JV competitive edge in high-end steel, EAF operation annual cost increase around 70 - 80 billion KRW if utilization 10%