POSCO FUTURE M

- Records consolidated sales of 467.2 billion and operating profit of 34.3 billion won in Q1, showing a sharp increase from last year
- Debt-to-equity ratio drops by over twofold, strengthening financial soundness and accelerating investment on energy materials
- Rise in sales to the EV sector improves sales of cathodes by 236% and anodes by 26% YOY
- Increased profit by PMC Tech following the rising demand for electrode rods reflected in the net profit

POSCO Chemical announced the Q1 performance based on consolidated financial results, with sales of 467.2 billion won and operating profit of 34.3 billion won on April 26, 2021

The company’s sales spiked by 20.6%, while operating profit surged 114.4% compared to the same period last year, yielding the highest quarterly sales and operating profit in the company’s history.

Sales and profit in the Energy Materials Division rose dramatically thanks to increased sales for EVs and enhanced cost competitiveness. Figures for cathodes rose by 236% from last year from 46 billion won to 154.7 billion won, while turnover for anodes increased by 26% from 41 billion won to 51.9 billion won.

Sales for Refractory Division began recovering backed by an increased utilization rate of steelmakers and activities that boosted profitability. In the Lime Chemical Division, sales of quicklimes fell slightly, but both sales and profits rose in the Chemical Division due to increased oil prices.

The needle coke business at PMC Tech, a POSCO Chemical subsidiary, also contributed to profit growth as demand for electrode rods surged under the low-carbon policy in China. PMC Tech recorded an operating profit ratio of 28.8% in Q1.

POSCO Chemical completed the paid-in capital increase of 1.2735 trillion won in January this year, which decreased the debt-to-equity ratio sharply from 104% in the previous quarter to 47.8%. The improved financial soundness has created a basis for accelerated investment in the energy materials sector.

Going forward, POSCO Chemical will continue making preemptive investment and innovating the production process in the cathode sector in preparation for the rapid growth of the EV market. As for anodes, the company will diversify its portfolio by developing next-generation materials including artificial graphite and silicone, and focusing its capability in marketing to obtain new customers.

In the Refractory Division, POSCO Chemical will strive to advance into new markets and secure competitiveness as a total solution provider based on manufacturing, maintenance, and construction capacity in preparation for the rebound in the downstream business. The Lime Chemical Division will continue the development of new businesses by increasing profitability and adding value to the by-product business.

In an effort to solidify its position as a top-tier manufacturer of secondary cell materials by 2025, POSCO Chemical will complete the raw materials value chain in connection with the securing of raw materials including lithium, nickel, and graphite, which the POSCO Group is implementing, and the expansion of the production capacity of cathodes and anodes. POSCO Chemical will build a production system with an output of 400,000 tons of cathodes and 260,000 tons of anodes, and achieve a global market share of 20% and annual sales of 23 trillion won in the secondary cell sector by the year 2030.

Q1 2021 performance by POSCO Chemical (Consolidated basis results)