POSCO Future M’s Operating Profit Jumps 23.2% to 82.144 Billion Won in Q3
Key Facts
POSCO Future M reported preliminary consolidated operating profit of 82.144 billion won in the third quarter of 2026, up 23.2% year over year, according to figures reported by ChosunBiz. The jump in profit came despite a 4.6% drop in revenue to 834.771 billion won. The divergence between profit growth and falling sales highlights the impact of improvement in some businesses, alongside compensation tied to a supply contract. Net profit was 46.428 billion won, close to the 46.449 billion won recorded in the same quarter of 2025. Net profit thus remained almost flat, while operating profit and revenue moved in opposite directions.
The battery materials business was the main driver of profitability, recording revenue of 459.6 billion won and operating profit of 51.8 billion won, with both figures higher than in the second quarter of 2026. In cathode materials, the company said results improved as sales volumes to existing customers recovered and prices rose. It added that compensation from a customer was recognized after the customer failed to purchase the contracted volume. The statement did not specify the amount of the compensation, so its value cannot be separated from the other factors that supported profit. Anode sales to overseas customers also rose, despite inventory valuation losses.
In further detail on the cathode business, the Energy Materials unit’s operating profit was 51.8 billion won, up 1,949% from a year earlier, according to ChosunBiz. Cathode sales reached 432.3 billion won, a 44% increase year over year. The company attributed the improvement to N87, a high-nickel cathode product, returning to normal production levels and to higher selling prices. It also said the customer compensation for not purchasing the contracted volume was reflected in the results. These factors show that the unit’s improvement combined higher sales and prices with a production recovery, alongside the effect of the compensation.
The Basic Materials unit recorded sales of 375.2 billion won and operating profit of 30.3 billion won in the third quarter, according to ChosunBiz. Quarter over quarter, the unit’s revenue rose 6.7% and operating profit increased 25.2% compared with the second quarter of 2026. The company said higher prices for oil-linked chemical products and increased lime sales, including quicklime, supported the business. The absence of exceptional refractory costs recorded in an earlier period also helped boost profitability. The segment’s improvement therefore came from prices, sales mix and the reduction of a non-recurring cost item, as well as quarterly growth.
The results came in a quarter in which parent company POSCO Holdings recorded consolidated revenue of 19.14 trillion won, up 10.9% year over year, and operating profit of 0.94 trillion won, up 47.9%. In its third-quarter presentation, POSCO Holdings reported POSCO Future M revenue of 835 billion won and operating profit of 82 billion won, compared with 875 billion won and 67 billion won, respectively, in the third quarter of 2025. These figures are consistent with profit growth at the subsidiary alongside an annual decline in revenue. At the subsidiary level, net profit did not keep pace with the expansion in operating profit, remaining close to its level a year earlier. This reflects differing movements across the results during the quarter, with compensation for unpurchased volumes among the factors the company cited for the improvement in cathodes.
Alongside its quarterly results, the company is converting production lines at its Pohang 2 plant to make lithium iron phosphate (LFP) cathodes. ChosunBiz reported that annual capacity after the conversion is expected to reach 105,000 tons. POSCO Holdings’ presentation specifies part of the plan as converting selected NCM lines at Pohang 2-2 to produce 50Ktpa by early 2027. POSCO Future M also said it plans to develop next-generation high-density LFP cathodes and expand investment in its Vietnamese subsidiary to produce synthetic graphite anodes. These steps run alongside efforts to improve existing cathode operations, directing production and investment toward other battery products and materials.
In forecasts reported by ChosunBiz, Shinhan Investment & Securities estimated cathode sales would reach 100,000 tons in 2027, more than double that year’s level, with LFP accounting for more than half of sales. The estimate links the planned expansion of production lines to expected growth in sales volume and a shift in product mix. The 105,000-ton figure is an estimate of annual capacity after the conversion is complete, while the parent company’s presentation sets a target of 50Ktpa from selected lines by early 2027. These figures represent different measures of the plan: expected capacity after conversion, targeted output from specific lines, and analysts’ forecast for 2027 sales. The next operational focus is on carrying out the conversions and developing the LFP and anode products the company has announced plans for.