Posco Holdings' first quarter net profit plunges 58%

Posco Holdings' consolidated net profit plunged 58 percent in the first quarter due to the impact of the shutdown of its Pohang steel mill and weak steelmaking business.

Posco Group Chairman Choi Jeong-woo speaks during the general shareholder meeting held in Gangnam District, southern Seoul, in March. [POSCO HOLDINGS]

Posco Holdings' consolidated net profit plunged 58 percent in the first quarter due to the impact of the shutdown of its Pohang steel mill and weak steelmaking business.

But on quarter, it swung to a net profit from a 700-billion-won ($522 million) loss as the Pohang steel mill in North Gyeongsang completely resumed operations in late January.

The company reported 800 billion won in net profit during the January-to-March period, down 58 percent on year but still beating the market consensus of 429.4 billion won compiled by FnGuide.

Operating profit plummeted 69.6 percent on year to 700 billion won, but exceeded the market expectation of 584 billion won.

Revenue decreased by 8.9 percent to 19.39 trillion won, slightly missing analyst expectations of 20 trillion won.

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

Profitability took a sharp fall in its steelmaking business as Posco halted operations of its Pohang rolling facilities 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 its operation in 49 years.

The Pohang steel mill has completely resumed all operations since Jan. 20, exactly 135 days after it was hit by the typhoon.

But the strong results of its non-steelmaking subsidiaries made up for its weakness.

Posco Future M generated 40.2 billion won in net profit, up 11.7 percent in the first quarter. Revenues soared 70.8 percent to an all-time high of 1.14 trillion won.

Sales of battery materials such as cathodes and anodes skyrocketed 77.1 percent to 780 billion won. Cathodes and anodes are key components in making electric vehicle batteries.

Posco Chemical recently renamed itself Posco Future M to better capture its focus on the battery material business.

Posco Future M inked a 30-trillion-won cathode deal with LG Energy Solution for high-nickel cathodes, just a few months after it signed a 40-trillion-won deal with Samsung SDI.

Posco Holdings shares rose 4.2 percent to close at 387,000 won Thursday.

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