POSCO Holdings' Q3 2024 Operating Profit Falls 38.3% to 740 Billion Won in Global Steel Slump as Net Income of 497 Billion Won Still Beats Expectations
POSCO Holdings closed the third quarter of 2024 with an operating profit of 740 billion won, down 38.3% year-on-year, as the slump in the global steel industry and stagnating electric-vehicle demand weighed on results. Sales fell 3.4% to 18.32 trillion won, while net income of 497 billion won (US$359.6 million), down 9.1%, still beat market expectations. The overseas business was the weakest part of the report: its operating profit plunged 90.1% to 7 billion won on the continued demand slowdown in China.
Q3 2024: operating profit down 38.3% in a weak steel market
SEOUL, October 30, 2024 — POSCO Holdings, the holding company of the POSCO steel group in South Korea, reported its results for the third quarter of 2024, as reported by the Yonhap News Agency. The quarter was shaped by two demand-side factors the company cited behind the decline in profit: the slump in the global steel industry and stagnating demand for electric vehicles. Corporate announcements and investor materials of the company are published on its website at https://www.posco.co.kr/.
The key reported figures for the third quarter of 2024 are as follows:
- operating profit — 740 billion won, down 38.3% year-on-year;
- sales — 18.32 trillion won, down 3.4% year-on-year;
- net income — 497 billion won (US$359.6 million), down 9.1% year-on-year.
On the reported percentages, the operating profit of 740 billion won corresponds to roughly 1.2 trillion won a year earlier, so the quarter removed about four tenths of the prior-year operating result. The revenue side held up better than the profit side: a 3.4% decline in sales to 18.32 trillion won is far narrower than the 38.3% contraction in operating profit, which points to margin pressure rather than a collapse in volumes or prices across the group as a whole.
Net income beats market expectations
The net line was the relatively stronger part of the report. Net income of 497 billion won (US$359.6 million) was down 9.1% year-on-year, yet it exceeded market expectations: the average analyst estimate for net income stood at 396 billion won, according to Yonhap Infomax. The reported result therefore came in about 101 billion won, or roughly a quarter, above the consensus figure.
The gap between the two profit lines is the notable feature of the quarter. Operating profit fell 38.3% while net income fell only 9.1%, and the net result cleared the market forecast that the operating result could not meet. For investors tracking the group, the beat against the 396 billion won consensus softens an otherwise weak operating quarter.
Two causes: the steel slump and stagnant EV demand
The report attributes the decline to two demand-side causes:
- the slump in the global steel industry, which pressured the core steelmaking business;
- stagnating demand for electric vehicles, which weighed on the group's battery-materials and related businesses.
Both causes act on the price and volume side at once. A weak global steel market compresses selling prices and margins in the group's principal business, while stagnant electric-vehicle demand slows the growth story built around battery materials. Together they explain why a modest 3.4% revenue decline translated into a 38.3% contraction in operating profit.
Overseas business: operating profit down 90.1% on China slowdown
The sharpest deterioration was recorded outside the home market. The operating profit of the overseas business plunged 90.1% to 7 billion won on the continued demand slowdown in China. On the reported percentage, the 7 billion won result corresponds to roughly 70 billion won a year earlier, so the overseas segment lost about nine tenths of its prior-year operating profit within a single year.
China matters to the group both as a market and as a price-setter: a continued slowdown in Chinese demand weakens regional steel prices and utilisation, and the overseas result shows how directly that pressure reaches the group's foreign operations. With the overseas operating profit reduced to 7 billion won, the third-quarter report leaves the domestic market and the net line, supported by the beat against expectations, as the steadier parts of the result.
Company information
Company: POSCO Holdings
Contacts: POSCO Holdings Communications, Seoul; media enquiries via https://www.posco.co.kr/
Company website: https://www.posco.co.kr/
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