Posco Holdings saw its operating profit drop 38.5 percent last year due to sluggish conditions in both the steel and battery materials sectors. The company‘s net loss in the fourth quarter came to over 700 billion won ($480.38 million), largely due to impairment losses from asset restructuring.

The company announced Monday that its 2024 revenue declined 5.8 percent year-on-year to 72.69 trillion won, while operating profit stood at 2.17 trillion won, down 38.5 percent. Net income fell 48.6 percent to 948 billion won.

In the fourth quarter alone, revenue slipped 5 percent year-on-year to 17.81 trillion won, while operating profit plummeted 69 percent to 95 billion won. Net loss reached 703 billion won, more than double the figure from the previous year.

Posco Holdings attributed the sharp decline in Q4 net earnings to a 1.3 trillion won non-cash impairment loss stemming from the restructuring of underperforming assets and deteriorating market conditions. In the steel sector, the company shut down inefficient plants, including its wire rod and steelmaking facilities, leading to impairment losses. The battery materials segment also saw asset write-offs related to aging anode and cathode equipment.

As part of its ongoing asset restructuring, Posco Holdings has completed 45 out of 125 planned projects, including 55 underperforming business units and 70 non-core assets. These moves generated 662.5 billion won in cash last year, with 100 billion won allocated to share buybacks and cancellations. The company plans to retire 6 percent of its treasury shares over three years, having already canceled 2 percent.

This year, Posco Holdings aims to complete an additional 61 projects, securing a total of 2.1 trillion won in cash to reinvest in growth initiatives.

During its earnings call, executives were questioned about the company’s potential expansion into the U.S. steel market, particularly regarding potential import tariffs on its products in Mexico. Posco Holdings responded that its shipments to the U.S. currently amount to just 100,000 tons, minimizing the impact. However, the company acknowledged that it is reviewing investment options for upstream production in the U.S. but remains cautious due to market volatility.

Meanwhile, battery materials subsidiary Posco Future M reported weak earnings, hit hard by a slowdown in demand for electric vehicles. The company posted a net loss of 231.3 billion won in 2024, reversing from a profit the previous year. Annual revenue dropped 22.3 percent to 3.7 trillion won, while operating profit plunged 98 percent to just 720 million won.

In the fourth quarter, Posco Future M recorded 723.2 billion won in revenue and an operating loss of 41.3 billion won. The company has declared an emergency management strategy to weather the downturn and plans to diversify its product portfolio through increased research and development.

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