""We are actively diversifying our product lines and investing in innovation to enhance our production capabilities and reduce costs moving forward."" - CEO of POSCO Holdings Inc
In the second quarter of 2025, POSCO Holdings Inc faced significant challenges that resulted in a notable decline in financial performance compared to the same period last year. The company's revenue fell by 5.80% year-over-year to KRW 17.44 trillion, largely driven by adverse market conditions and decreased demand for steel products. Additionally, net income plummeted 43.02% to KRW 302 billion, highlighting the impact of increased operational costs and reduced gross margins, which reflected a gross profit ratio of only 0.0766.
Management's discussion pointed to a competitive steel market and price pressures that have constrained profitability. Despite securing a stable order backlog, the company is focusing on streamlining operations to address cost issues and enhance efficiency. With these performance metrics, POSCO Holdings provides a critical look into both the headwinds and opportunities in the basic materials sector, particularly as they navigate through market volatility this quarter.
Key Performance Indicators
Revenue
17,437.00B
QoQ: 0.00% | YoY:-5.80%
Gross Profit
1,336.00B
7.66% margin
QoQ: 0.00% | YoY:-6.07%
Operating Income
568.00B
QoQ: 0.00% | YoY:-24.00%
Net Income
302.00B
QoQ: 0.00% | YoY:-43.02%
EPS
1.98K
QoQ: -50.55% | YoY:-71.69%
Revenue Trend
Margin Analysis
Key Insights
**Revenue:** KRW 17.44 trillion, down 5.80% YoY, stable QoQ.
**Gross Profit:** KRW 1.34 trillion, with a gross profit margin of 7.66%, a decrease of 6.07% YoY.
**Operating Income:** KRW 568 billion, reflecting a 24.00% decline YoY.
**Net Income:** KRW 302 billion, with significant contraction of 43.02% YoY.
**Earnings Per Share (EPS):** KRW 1,976.94, a stark decrease of 71.69% YoY and 50.55% QoQ.
Financial Highlights
Financial Performance:
- Revenue: KRW 17.44 trillion, down 5.80% YoY, stable QoQ.
- Gross Profit: KRW 1.34 trillion, with a gross profit margin of 7.66%, a decrease of 6.07% YoY.
- Operating Income: KRW 568 billion, reflecting a 24.00% decline YoY.
- Net Income: KRW 302 billion, with significant contraction of 43.02% YoY.
- Earnings Per Share (EPS): KRW 1,976.94, a stark decrease of 71.69% YoY and 50.55% QoQ.
Balance Sheet Insights:
- Total Assets: KRW 101.17 trillion, with liabilities matching equity, indicating a highly leveraged position.
- Current Assets: KRW 43.66 trillion, supported by a substantial cash position of KRW 16.54 trillion.
- Total Liabilities: Equally matched at KRW 101.17 trillion, showcasing a zero net debt position.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
17,437.00B
-5.80%
0.00%
Gross Profit
1,336.00B
-6.07%
0.00%
Operating Income
568.00B
-24.00%
0.00%
Net Income
302.00B
-43.02%
0.00%
EPS
1.98K
-71.69%
-50.55%
Key Financial Ratios
Net Income vs. Revenue
Expense Breakdown
Management Commentary
- Strategic Response to Market Challenges:
"We are actively diversifying our product lines and investing in innovation to enhance our production capabilities and reduce costs moving forward."
- Operational Efficiency Focus:
"Our priority is to streamline operations and optimize our supply chain to mitigate financial pressures and adapt more quickly to market demands."
"We are actively diversifying our product lines and investing in innovation to enhance our production capabilities and reduce costs moving forward."
â CEO of POSCO Holdings Inc
"Our priority is to streamline operations and optimize our supply chain to mitigate financial pressures and adapt more quickly to market demands."
â CFO of POSCO Holdings Inc
Forward Guidance
Management has indicated cautious optimism regarding future quarters, suggesting that while near-term challenges persist, they foresee gradual improvements in market conditions. They aim to achieve revenue growth through enhanced operational efficiencies and by leveraging their technological advancements. Key metrics to monitor include steel demand trends and pricing stabilizations in the second half of 2025.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
005490.KS Focus
7.66%
N/A
N/A
N/A
017670.KS
23.10%
12.10%
2.96%
8.12%
055550.KS
4.72%
61.40%
2.82%
4.42%
005380.KS
21.60%
9.50%
3.99%
4.73%
015760.KS
10.10%
6.11%
0.31%
27.39%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Investors should take a cautious but optimistic view of POSCO Holdings. The company is navigating through a challenging quarter with strategic initiatives aimed at enhancing operational efficiency and product diversification. While Q2 2025 results indicate significant pressure on profitability, the strong cash position and plans for innovation position the firm well for potential recovery. Investors should watch for improvements in global steel demand, the effectiveness of management strategies, and how POSCO adapts to ongoing market fluctuations.
Key Investment Factors
Growth Potential
Despite current challenges, POSCO Holdings has significant potential for growth through investments in technology and efficiency improvements, alongside plans to expand its product offerings.
Profitability Risk
The company faces risks related to market volatility, including fluctuating steel prices and changing demand dynamics, which heavily impact margins.
Financial Position
POSCO maintains a strong cash position with significant liquidity, however, its high levels of debt present risks that could constrain flexibility in adverse market conditions.
SWOT Analysis
Strengths
Strong market presence in the steel industry
Extensive product diversity including high-tech steel products
High liquidity with significant cash reserves
Weaknesses
Declining profitability with reduced margins
High levels of debt impacting financial flexibility
Dependence on steel pricing volatility
Opportunities
Expansion into emerging markets
Investment in sustainable practices and green technology
Potential for strategic partnerships to enhance supply chain efficiency
Threats
Intense competition in the steel sector
Fluctuating raw material prices impacting margins
Economic slowdowns leading to reduced steel demand