Posco Holdings' consolidated net profit plunges 77% in Q3

Posco Holdings Chairman Choi Jeong-woo waves a flag to celebrate the establishment of Posco Holdings. [POSCO HOLDINGS]

Posco Holdings' consolidated net profit plunged 77 percent in the third quarter, largely impacted by the shutdown of its Pohang steel mill that was flooded by Typhoon Hinnamnor last month.

The company reported 592 billion won ($410.6 million) in net profit in the third quarter, down 77.2 percent on year, falling short by a long shot of the market consensus of 1.1 trillion won compiled by FnGuide.

Quarterly revenue came in at 21.2 trillion won, up 2.9 percent, while operating profit dropped 71 percent to 920 billion won. Both figures failed to meet market expectations.

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

Profitability sharply fell in its steelmaking business as Posco halted operations of its Pohang rolling facilities in South Gyeongsang on Sept. 7 due to flooding caused by Typhoon Hinnamnor. It was the first time for Korea’s largest — and the world’s fifth-largest — steelmaker to halt an operating line in 49 years.

Posco Holdings "reflected 435.5 billion won of expenses related to damage at the Pohang steel rolling facility including recovery costs and potential loss," said Han young-ah, head of the Internal Relations team during a conference call held Monday afternoon.

"It may cost some 300 billion won more in the fourth quarter."

Non-steelmaking subsidiaries reported strong results in the third quarter.

Posco Chemical generated 65.6 billion won in net profit, up 61 percent in the third quarter. Revenues soared 108.6 percent to 1.05 trillion won, while operating profit surged 160 percent to 81.8 billion won.

It's the first time the battery materials company exceeded the 1-trillion-won-mark for quarterly revenues.

Sales of battery materials such as cathodes and anodes skyrocketed 239 percent to 726.7 billion won, accounting for 69 percent of the total sales of Posco Chemical, from 42.5 percent in the third quarter of last year.

Posco International, a trading arm of Posco Holdings, saw its net profit rise 63.5 percent to 112.8 billion won.

Revenue came in at 9.04 trillion won, down 1.2 percent, while operating profit rose 32.7 percent to 197 billion won.

Posco Holdings shares fell 0.4 percent to 248,000 won Monday.

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