Investing.com — POSCO (KS:005490) reported third-quarter net profit below analyst expectations as weakness in its battery materials business offset stronger steel earnings, with lower lithium prices and reduced production at its Argentina operations weighing on the division.
The South Korean steel group posted net profit of KRW380 billion for the quarter, down 2.6% from a year earlier and below the KRW432.8 billion average analyst estimate compiled by Yonhap Infomax, according to Yonhap News Agency.
The battery materials division swung to an operating loss amid declining global lithium prices and reduced production at POSCO Argentina during the winter season, local media reported.
This contrasted with a recovery in the steel business, where higher selling prices and increased sales volumes helped lift operating profitability despite rising raw material costs.
Operating profit increased 47.9% year on year to KRW940 billion, exceeding market expectations of KRW750 billion to KRW790 billion, according to ChosunBiz. Revenue rose 10.9% to KRW19.14 trillion.
POSCO Holdings said its steel division had been the main driver of the improvement in operating performance. POSCO Future M, the group’s battery materials subsidiary, also recorded an improvement in operating profit from the previous quarter, supported by a recovery in cathode material sales and higher selling prices.
However, the weakness in lithium-related operations and the broader battery materials business left the improvement in operating profit yet to translate into stronger net earnings.
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