POSCO Holdings (PKX) Q3 2022 Earnings Call Transcript

For the period ending September 30, 2022

October 24, 2022 3:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, now we will begin POSCO Holdings Earnings Release for Q3 of 2022. Today's conference call will begin with the earnings presentation of POSCO Holdings followed by a Q -- question-and-answer session. [Operator Instructions]

And now, we will hear the presentation by POSCO Holdings.

Unidentified Company Representative

I would like to begin by thanking all of our investors for their steadfast trust and support. The third quarter proved to be a difficult time for steel manufacturers due to the war in Ukraine, the 2Q conflict and continued issues in the global supply chain coupled with tighter fiscal policies adopted by states around the world leading to economic slowdown across the globe. At the same time, along with the announcement of ARA (ph) policies in the U.S. in August and the highlighting of the importance of securing critical materials for lithium-ion battery such as lithium and nickel has led to the construction of a cathode plant in the U.S. with GM.

For POSCO, which has secured critical materials for EV materials such as lithium and nickel, the third quarter has indeed been a period mix with opportunities. POSCO Holdings has retired 2.6 million shares in August to strengthen shareholder value along with making investments for future growth, including the investment decision for the second-stage project in Argentina in October for lithium carbonate to achieve 100,000 tons of lithium hydride production early than scheduled.

However, on September 6, one of the streams in Pohang area was flooded due to heavy rain, which put a temporary halt on the entire operation of Pohang steel mill. In particular, the rolling line adjacent to the stream was submerged in water causing an unprecedented crisis in operation. All members of POSCO as well as POSCO Holdings and the entire group are pulling their energy together with dedication to normalize the steel mill operation.

Damage recovery task force was organized in order to stabilize the steel supply and minimize any impact on our customers. The recovery is currently progressing smoothly according to our plan and by the end this year, we plan to resume operation of major plants, including number two HR plant, so that the customer demand could be met with no issue by the end of this year.

Following the COVID outbreak in 2020, we were impacted yet again by another Force Majeure event that presents us with challenges. However, all members of our group are coming together to widely overcome the difficulties and we continue to bolster our new growth businesses to maintain our transformation and innovation so that we can leverage this as an opportunity to take another lead forward.