Posco Holdings beats consensus with $900 million Q3 profit

Posco Holdings Chairman Choi Jeong-woo speaks at a shareholder meeting on March 17 in Gangnam, southern Seoul. [YONHAP]

Posco Holdings logged a consensus-beating 1.2 trillion won ($900 million) in consolidated operating profit in the third quarter despite sluggish steel sales globally.

The quarterly operating profit came in at 1.19 trillion won, up 33.3 percent on year, beating market expectations of 1.1 trillion won compiled by market tracker FnGuide.

Revenues fell 10.4 percent to 18.96 trillion won, missing the market consensus of 20 trillion won. Net profit stayed flat at 555 billion won, also falling far short of the expected 790 billion won.

The consolidated earnings include those of its subsidiaries, which include steelmaker Posco, Posco Future M and Posco International.

The company attributed "growing sales of high-margin steel sales" as the biggest reason behind the better-than-expected performance, though "demand remains weak globally."

Posco Future M, its battery materials-making subsidiary, saw a 55 percent decline in operating profit to 37.1 billion won in the third quarter, due to the falling prices of raw materials like lithium and nickel.

Its quarterly sales, however, reached an all-time high of 1.2 trillion won, up 22.1 percent on year.

Sales of battery material businesses rose 13.1 percent on quarter to 953.2 billion won during the same period. Sales of cathodes grew 10.4 percent to 786.3 billion won.

Cathodes are the major materials in making EV batteries that make up 40 percent of the total battery cost.

Posco Future M won orders of 106 trillion won so far from various major battery makers including Samsung SDI, LG Energy Solution and Ultium Cells.

Posco Future M aims to increase its cathode production capacity to 1 million tons and anode to 360,000 tons by 2030.

Posco International, a trading company, generated 312 billion won in operating profit, up 58.2 percent on year.

Posco Holdings shares rose 4.6 percent to close at 474,000 won Tuesday.

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