Posco Holdings beats market consensus for net profit in first quarter

Posco Center building in Gangnam District, southern Seoul [YONHAP]

Posco Holdings reported 1.9 trillion won ($1.5 billion) in consolidated net profit in the first quarter, up 67.5 percent on year.

That beat the market consensus of 1.25 trillion won compiled by market tracker FnGuide.

Quarterly revenue stood at 21.3 trillion won, up 32.8 percent on year, while operating profit rose 43.9 percent to 2.3 trillion won, both beating market expectations.

The consolidated earnings include those of its subsidiaries, a list that includes steelmaker Posco, Posco Chemical, Posco International and Posco Energy.

The company on Monday attributed "strong demand for steel from automobile and shipbuilding industries" to its better-than-expected figures, "despite the rising prices of raw materials."

Steelmaker Posco generated 1.2 trillion won in operating profit, up 11.7 percent on year. Revenue increased 45 percent to 11.3 trillion won. Data for net profit was not available.

“Profit in the domestic market decreased due to the sales drop and increase in raw materials prices,” Chon Jung-son, co-CEO of Posco Holdings, said during a conference call Monday afternoon. “But we were able to maintain the profit largely due to the increased sales overseas.”

Steel sales in its overseas subsidiary PT Krakatau Posco in Indonesia helped, the company explained. Quarterly revenue of the company rose 12 percent to $508 million.

Non-steelmaking subsidiaries also largely helped, Posco Holdings said.

Posco Chemical generated 36 billion won in net profit, down 9.5 percent in the first quarter. Operating profit was down 25.2 percent to 25.5 billion won, but revenue was up 42.2 percent to report a quarterly record high of 664.6 billion won.

Posco Chemical said sales of battery materials helped increase revenue. Sales of battery materials increased 44.1 percent to 317.1 billion won, and of them, sales of anode jumped 76 percent on year to 272.2 billion won.

Posco International, a trading arm of Posco Holdings, saw its net profit rise 75.5 percent to 163.1 billion won.

Revenue rose 39.8 percent to 9.9 trillion won while operating profit was up 70.2 percent during the same period to 216 billion won. The revenue and profits were all all-time highs.

Posco Holdings projects its annual consolidated revenue for this year to stand at 77.2 trillion won.

On Monday, the company also announced its plans to reduce 10 percent of its carbon emissions by 2030. It also said it aims to increase its anode and cathode annual capacity to 930,000 tons and lithium and nickel to 530,000 tons by the same year.

BY SARAH CHEA [chea.sarah@joongang.co.kr]