POSCO Holdings Inc. Remains Hopeful for the Future Despite Economic Challenges
POSCO Holdings Inc. acknowledged a difficult financial year marked by high US interest rates, China’s economic slowdown, geopolitical risks, and a reduced demand for electric vehicles (EVs) in their Q4 2024 results announced on January 31, 2024. Ki Seop Jeong, POSCO’s Chief Strategy Officer (CSO), addressed the challenges that have affected the company’s performance but maintained a positive outlook for the future.
Commitment to Sustainable Growth
Despite facing economic difficulties, POSCO persisted in its efforts towards sustainable growth, investing in low carbon steelmaking technologies and the construction of lithium hydroxide and recycling plants. The completion of the POSCO Pilbara Lithium Solution plant was a significant step towards eco-friendly solutions and established the company’s strategic position within the EV supply chain.
Strategic Consolidation for Enhanced Efficiency
In an effort to increase operational efficiency, POSCO implemented a strategic consolidation initiative that amalgamated POSCO International and POSCO Energy. This consolidation was also aimed at improving ESG (Environmental, Social, and Governance) governance across the group. As a result, there was a noticeable improvement in the company’s ESG scores as per rating providers.
A Forward-looking Strategy: Strengthening Capital Efficiency
Addressing the future strategy of POSCO Holdings, Jeong indicated a focus on strengthening the company’s bottom line, improving capital efficiency, and maintaining a balance between growth and shareholder returns. To demonstrate the company’s commitment to their shareholders, the Board has approved a Q4 dividend of KRW 2,500 per share, the overall annual payout being KRW 10,000 per share.
Financial Outcomes and Upcoming Investments
Young Ah Han, led the briefing on the company’s financial performance. Despite a decrease in the annual revenue and operating profit year-on-year, the company managed to maintain a low net debt ratio. The fourth quarter recorded significant losses within the steel and materials sectors but revealed profit in areas associated with eco-friendly infrastructure. POSCO holds plans to make strategic investments including a pilot plant for hydrogen steelmaking, a joint venture for steel production in China, and has also secured rights for green hydrogen production in Oman, which all contribute positively to their ongoing ESG efforts.
