South Korea’s POCO Holdings Inc. said on Monday it plans to sell 61 unprofitable and non-core assets to raise 1.5 trillion won ($1 billion) as part of a restructuring as it suffered a nearly 40% drop in profit due to sluggish steel and battery materials businesses.
POSCO Holdings, the parent of the world’s No. 7 steelmaker POSCO and a major battery materials producer POSCO Future M Co., said its operating profit fell 38.5% to 2.2 trillion won on a consolidated basis in 2024 with sales down 5.8% to 72.7 trillion won.
POSCO has been under pressure from the intensifying competition with Chinese rivals, while POSCO Future M has been hurt by the prolonged weakness in the global electric vehicle market.
“We will sell unprofitable businesses and non-core assets this year to improve asset efficiency,” POSCO Holdings said in an earnings call.
“We aim to secure an additional 1.5 trillion won in cash by restructuring 61 units this year after generating 662.5 billion won by selling 45 businesses and assets last year.”
POCO Holdings expects its earnings to improve in the second half.
The restructuring program in 2025 reportedly includes the sale of its stake in POSCO Zhangjiagang Stainless Steel Co. (PZSS), a joint venture with Shagang Group, China’s second-largest steel producer also known as Shasteel.
POSCO Holdings last year sold its power plant in Papua New Guinea, a service unit in China, shares in KB Financial Group and others last year.
TO INVEST MORE IN FUTURE CASH COWS
POSCO Holdings plans to raise investments in future growth engines such as an integrated steel plant in India.
POSCO Holdings also aims to spend more on the diversification of secondary battery materials.
POCO Future M decided to increase investments in the development of high-nickel cathodes, high-voltage mid-nickel, lithium-rich manganese-based layered oxide (LMR) and lithium manganese iron phosphate (LMFP).
The EV battery materials producer plans to cooperate with the group’s research units to develop next-generation products.
By Sang Hoon Sung
uphoon@hankyung.com
Jongwoo Cheon edited this article.
