POSCO(US:PKX)2023-10-30 00:58Financial Data and Key Metrics Changes - In Q3 2023, the company reported consolidated revenue of KRW 18.961 trillion, a 5.8% decrease compared to the previous quarter, and an operating profit of KRW 1.196 trillion, which represents an 89.8% decrease quarter-on-quarter [80][84] - The operating profit in the steel sector decreased to KRW 852.7 billion, down from KRW 1 trillion in Q2 2023, due to a drop in selling prices and decreased product output [81][86] - The debt-to-equity ratio stood at 13.7%, indicating a sound financial structure despite ongoing investments [82] Business Line Data and Key Metrics Changes - The steel business generated robust profits through improved product mix and lower raw material costs, despite a drop in selling prices [81] - The green infrastructure sector saw a 9% decrease in revenue and a 7% decrease in operating profit compared to the previous quarter, but year-on-year operating profit grew by 19.9% [87] - The lithium battery materials business faced margin pressure due to declining prices of key raw materials, impacting profitability [87] Market Data and Key Metrics Changes - The company noted that the steel price has dropped to levels seen at the start of the year, with expectations of a weak market outlook continuing into Q4 2023 [90][73] - The global steel market is projected to grow by about 2.9% in 2024, while the Korean market is expected to grow by around 1.1% [73] Company Strategy and Development Direction - The company aims to secure short to mid-term profitability while allocating investment resources to support long-term growth strategies [82] - Investments are being made in the lithium battery materials sector, with plans to complete construction of new plants and enhance production capabilities [88][59] - The company is focusing on high-value-added products to maintain profitability amidst challenging market conditions [73] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns over the ongoing economic slowdown and geopolitical tensions affecting business operations [80] - The company anticipates that the market will remain weak in Q4 2023, with a focus on cost-cutting and strategic sales in shipbuilding and automotive industries [73] - Management is optimistic about the long-term growth potential in the lithium and green materials sectors despite current challenges [87] Other Important Information - The construction of the lithium refining plant has been delayed, with completion now expected in Q1 2024 [88] - Recent labor disputes have caused delays in construction projects, but operations are expected to return to normal [88] Q&A Session All Questions and Answers Question: What is the outlook for the sales market in Q4 and next year? - Management indicated that the sales market outlook remains weak, with a focus on shipbuilding and automotive industries for better performance [73] Question: What are the plans regarding shareholders' equity and stock extinguishment? - The company has no immediate plans for extinguishing additional treasury stocks but will consider financial situations in the future [19] Question: Can you provide updates on labor strikes? - The labor union is set to vote on whether to strike, with mediation efforts ongoing until the end of October [39][40]