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Investing.com -- Posco Holdings, the South Korean steelmaker, reported a decrease in its first-quarter net profit, partly due to the tariffs imposed on all steel and aluminum imports into the U.S. by the Trump administration.
The company stated on Thursday that both production and sales of steel goods fell due to repair work at its steel mills, and it faced challenging business conditions, exacerbated by the global tariff war and economic uncertainty. Despite this, higher steel prices and cost-saving efforts helped to improve profitability.
The company’s net profit for the January-March quarter was 344.00 billion won, equivalent to $241.0 million, representing a 43% decrease from the same period a year earlier. This figure aligns closely with a consensus estimate of 335.93 billion won, as compiled by FactSet.
Posco’s revenue for the quarter fell 3.4% to 17.437 trillion won, and its operating profit declined 2.6% to 568.00 billion won. The company’s main steel business returned to net profit in the first quarter after a loss in the previous quarter. This was partly due to an increase in carbon-steel prices, despite a decrease in output.
The net loss in Posco’s energy-material business, which includes its battery-making affiliate Posco Future M, significantly narrowed in the first quarter.
In response to the 25% duties on steel and aluminum imports imposed by Trump, Posco announced that it will expand its cooperation with Hyundai Motor (OTC:HYMTF). The companies plan to make joint investments to address global trade restrictions and build a global supply chain, excluding China, in the electric-vehicle battery material sector.
Earlier this week, Posco stated that it plans to make an equity investment in Hyundai Motor’s $5.8 billion steel mill, set to be built in Louisiana. This business cooperation could help both companies mitigate the impact of U.S. tariffs.
Posco also revealed its investment plan for this year, intending to invest 8.8 trillion won, slightly lower than the 9.0 trillion won set in 2024.
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