POSCO Holdings (005490) Q4 2025 earnings summary

Executive summary

• 2025 saw a challenging environment with global trade policy shifts and economic slowdown, leading to a focus on short-term profit protection and groundwork for future growth.

• Operating profit declined in 2025 due to weak Rechargeable Battery Materials and Construction, despite a recovery in Steel; profits are expected to grow in 2026 with commercial-scale lithium production and asset sales.

• Strategic focus on decarbonization, high-margin steel products, and overseas JVs to drive growth and mitigate trade risks.

• Major lithium and battery materials projects in Argentina and Australia are set to contribute to profits from 2H 2026.

• Significant one-off costs included construction halts at POSCO E&C, ramp-up costs for new lithium and precursor plants, and divestment-related expenses.

Financial highlights

• 2025 consolidated revenue: KRW 69.1 trillion, down 5% year-on-year; operating profit: KRW 1.8 trillion, down 16%.

• 2025 net profit: KRW 504 billion, down from KRW 948 billion in 2024.

• FY 2025 consolidated EBITDA was KRW 5.98 trillion, with an EBITDA margin of 8.7%.

• POSCO's operating profit margin improved to 5.1%, despite Q4 margin pressure from high raw material costs and inventory adjustments.

• Net debt increased to KRW 12.9 trillion in 2025, with a net debt to equity ratio of 20.7%.

Outlook and guidance

• 2026 expected to be an inflection point, with overseas steel expansion and commercial production at Argentina lithium plant.

• Profits projected to rise in 2026 with new lithium production and further non-core asset sales.

• CAPEX to increase in 2026 due to overseas steel investments and lithium asset acquisitions.

• Cost Innovation 2030 aims to save KRW 0.4 trillion in 2026 by streamlining operations.

• Sales volume for lithium expected at 50,000–60,000 tons, double last year, with profitability improvements anticipated.