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By Kim Seung-yeon
SEOUL, July 24 (Yonhap) — POSCO Future M Co., a chemical unit of South Korea’s POSCO Holdings Inc., reported on Monday that its second-quarter operating profit declined 5.6 percent year-on-year, while announcing a plan to invest over 680 billion won (US$529 million) to construct a manufacturing facility for a key electric vehicle (EV) battery material.
Operating income amounted to 52.1 billion won in the April-June period, down from 55.2 billion won in the same period of the previous year, the company said in a regulatory filing.
Sales increased 48.5 percent year-on-year to 1.19 trillion won. Net income totaled 43.1 billion won, a decrease of 7.1 percent from the previous year.
POSCO Future M revealed in a separate filing that it will invest 683.4 billion won to build a facility to produce high-nickel cathodes, a critical component of EV batteries, along with anodes, separators, and electrolytes. Cathodes determine the power and range of EV battery cells and account for more than 40 percent of the cell’s production cost.
The facility will be constructed in the company’s main cathode complex in Gwangyang, located about 300 kilometers southwest of Seoul, with an annual capacity to produce 52,000 tons of cathodes consisting of lithium, nickel, cobalt, and aluminum (NCA).
POSCO Future M is diversifying its business into the battery materials sector as part of its transition to green energy. It provides cathodes to Samsung SDI Co., LG Energy Solution Ltd. (LGES), and Ultium Cells LLC., a U.S. joint venture between LGES and General Motors Co. The company has an order backlog of 106 trillion won.
In the second quarter, the battery materials segment earned 37.5 billion won in operating profit on sales of 842.5 billion won, with the sales of cathodes accounting for the majority of the sector’s revenue. Sales of anodes came in at 56.2 billion won.
Basic chemical materials, such as refractories and burned lime, posted an operating profit of 14.6 billion won, with sales of 350.5 billion won.
Shares in POSCO Future M soared 10.5 percent to 542,000 won on the main Seoul bourse Monday, compared to the broader KOSPI’s 0.72 percent gain. The earnings results were released after the market opened.