South Korean steel giant POSCO Group Chairman Chang In-hwa’s third-year report card is decidedly mixed. The company has delivered visible results on capital efficiency through share cancellations and divestment of low-return assets, but large-scale growth investments have pushed group total borrowings past 30 trillion won and triggered credit rating downgrades. Repeated construction site fatalities have also led to financial losses and dented confidence in the group’s safety management.

POSCO Holdings announced a corporate value enhancement plan in July 2024, pledging to cancel approximately 6% of total outstanding shares in phases between 2024 and 2026. The company completed 2% cancellations each in July 2024, March 2025, and March 2026, and separately repurchased and fully cancelled approximately 100 billion won (approximately $72.4 million) worth of treasury shares in 2024.

Business restructuring proceeded in parallel. Since 2024, POSCO Holdings has been divesting low-return businesses and non-core assets with weak strategic alignment to the group, generating cumulative cash of 2.2 trillion won (approximately $1.6 billion) through the first half of this year. The company has expanded its restructuring scope, targeting a total of 129 asset disposals and cumulative cash generation of 3.5 trillion won (approximately $2.5 billion) by 2028.

The capital raised has been reinvested into future growth businesses including steel, battery materials, and lithium. As of end-June this year, total investment in major new and expansion projects underway stood at 6.05 trillion won (approximately $4.4 billion) for the steel division, 2.02 trillion won (approximately $1.5 billion) for infrastructure, and 7.41 trillion won (approximately $5.4 billion) for battery materials. Of the battery materials allocation, 5.42 trillion won (approximately $3.9 billion) has already been deployed, with an additional 1.99 trillion won (approximately $1.4 billion) planned.

Overseas investment has also been aggressive. POSCO signed a joint venture agreement with India’s JSW Steel this year for an integrated steel mill, while POSCO Holdings entered into a $765 million (~1.1 trillion won) equity investment agreement with Australian mining company Mineral Resources for a lithium mine stake. POSCO Future M approved investment in a synthetic graphite anode materials project in Vietnam.

Mounting Financial Burden and Credit Rating Downgrade

As growth investments continued, financial strain accelerated. POSCO Holdings’ consolidated total borrowings rose from 21.74 trillion won (approximately $15.7 billion) in 2021 to 26 trillion won (approximately $18.8 billion) in 2024 and 28.49 trillion won (approximately $20.6 billion) in 2025, reaching 30.4 trillion won (approximately $22.0 billion) as of end-June this year. Net debt increased from 3.58 trillion won (approximately $2.6 billion) in 2021 to 16.11 trillion won (approximately $11.7 billion) at end-June, while the net debt ratio climbed 18.6 percentage points from 6.5% to 25.1% over the same period.

Global credit rating agencies have flagged financial strain from expanded investment as a key risk factor. S&P lowered POSCO Holdings’ credit rating outlook from “stable” to “negative” in March 2025, then downgraded the rating one notch from A- to BBB+ in March this year, citing high capital expenditure and a weak operating environment. Moody’s maintained its Baa1 rating in February this year but revised the outlook from “stable” to “negative,” pointing to adjusted net debt/EBITDA rising from 1.9x in 2024 to 2.2x in 2025 and expectations of continued large-scale investment through 2026-2027.

Key financial metrics for POSCO Holdings are as follows:

YearTotal BorrowingsNet DebtNet Debt Ratio202121.74 trillion won3.58 trillion won6.5%202426 trillion won–202528.49 trillion won12.9 trillion won20.7%End-June 202630.4 trillion won16.11 trillion won25.1%

Note: End-June 2026 net debt ratio is on a consolidated basis; 2025 net debt is the year-end figure cited in the article.

Earnings Recovery and Remaining Challenges

Group-wide earnings showed a clear downward trajectory after Chairman Chang took office. Consolidated operating profit declined from 3.53 trillion won (approximately $2.6 billion) in 2023 to 2.17 trillion won (approximately $1.6 billion) in 2024 and 1.83 trillion won (approximately $1.3 billion) in 2025 — a roughly 48.3% drop over two years. Net profit for 2025 was 504.4 billion won (approximately $365.1 million), down 46.8% from the prior year.

However, divisional performance diverged. The core steel business improved profitability through structural cost innovation, posting 2025 operating profit of 1.96 trillion won (approximately $1.4 billion), up 19.8% year-on-year. POSCO International also defended group profitability with 2025 operating profit of 1.17 trillion won (approximately $843.6 million). In contrast, the battery materials division saw 2025 revenue fall 12.8% year-on-year to 3.34 trillion won (approximately $2.4 billion), with operating losses widening to 440.9 billion won (approximately $319.2 million).

The construction division significantly dragged down group earnings. The construction segment centered on POSCO E&C swung to a 504.4 billion won (approximately $365.1 million) operating loss in 2025, with additional costs from accidents and construction suspensions cited as the primary cause. As a result, total infrastructure division operating profit fell 48.6% from 1.33 trillion won (approximately $960.0 million) in 2024 to 682 billion won (approximately $493.7 million) last year.

A recovery has emerged this year. POSCO Holdings posted first-half consolidated revenue of 37.13 trillion won (approximately $26.9 billion) and operating profit of 1.53 trillion won (approximately $1.1 billion), up 6.1% and 29.8% year-on-year respectively. Net profit surged 204.8% to 1.3 trillion won (approximately $944.5 million). However, this figure includes 480 billion won (approximately $347.5 million) in gains from disposal of investments in subsidiaries and associates during restructuring — a one-time factor unrelated to operating profit improvement that inflated the bottom line.

Unlike the earnings improvement, cash generation weakened. First-half consolidated operating cash flow was 708.6 billion won (approximately $513.0 million), down 70.9% from 2.43 trillion won (approximately $1.8 billion) in the same period last year. The decline was driven by 2.68 trillion won (approximately $1.9 billion) in cash outflows from changes in operating assets and liabilities, including an increase in trade receivables.

Repeated Safety Incidents Erode Trust

Apart from financial performance, safety issues stand as the biggest blemish on Chairman Chang’s tenure. According to South Korea’s Ministry of Employment and Labor, POSCO E&C construction site fatalities totaled 3 in 2024 and 5 in 2025, and in June this year, a subcontractor worker fell to his death at the Sinansan Line double-track railway construction site. This stands in stark contrast to Chang’s repeated emphasis on safety as the group’s top priority.

The accidents also translated into financial losses. POSCO Holdings cited accidents, resulting construction suspensions, and additional costs as reasons for the construction division’s 504.4 billion won loss last year. Safety management failures have thus impacted both actual earnings and group-level credibility.

POSCO Group established a safety innovation organization reporting directly to the CEO and re-examined safety management systems across all worksites, formulating a “Zero Serious Accidents Master Plan.” However, with another fatality occurring this year, questions are being raised about the effectiveness of these measures. Chairman Chang stated: “We will mobilize all available company capabilities, including securing safety budgets and related investments, to restore public trust in industrial safety and ensure the same type of accident never recurs at any group worksite.”

POSCO Group plans to pursue 16.7 trillion won (approximately $12.1 billion) in growth investments in future businesses and other areas through 2028. The assessment of Chairman Chang’s remaining term hinges on how quickly capital efficiency gains translate into actual profit and cash, and whether financial soundness can be restored.