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South Korea’s largest steelmaker will retire 1.69 million shares by March 31, completing a programme to cancel 6% of outstanding stock. Consolidated net profit fell 47% in 2025, though the headline decline owes more to battery materials and restructuring losses than to American trade barriers alone.
The Cancellation
POSCO Holdings’ board approved the cancellation of 1,691,425 common treasury shares on February 19, valued at approximately KRW 635.1 billion ($439 million) based on the previous day’s closing price of KRW 248,500. The retirement, scheduled for March 31, marks the final phase of a three-year programme announced in July 2024 to cancel 6% of outstanding shares by end-2026, with 2% retired each year. The cancellation is conducted under existing distributable profits and does not reduce stated capital. Separately, the company confirmed an annual dividend of KRW 10,000 per share for 2025 — paid quarterly at KRW 2,500 — to be approved at the 58th annual general meeting on March 24 in Seoul.
The Numbers Behind the Decline
POSCO Holdings reported 2025 consolidated revenue of KRW 69.1 trillion, down from KRW 72.7 trillion in 2024, with operating profit falling 16% to KRW 1.83 trillion and net profit dropping 47% to KRW 504 billion from KRW 948 billion. The headline profit decline, however, tells a more complex story than the tariff narrative alone suggests. The 2024 result already included KRW 1.3 trillion in non-cash losses from asset impairments and preemptive restructuring of low-yield businesses. In 2025, the battery materials segment — centred on POSCO Future M’s cathode and anode operations — continued to weigh on results amid falling lithium prices and the delayed US Foreign Entity of Concern (FEOC) designation of natural graphite, while POSCO E&C booked one-off losses from the Shinansan Line construction accident and a temporary suspension of all building sites for safety inspections.
The steel business itself, on a standalone POSCO basis, actually improved. Revenue fell 6.8% to KRW 35 trillion, but operating profit rose 20.8% to KRW 1.78 trillion thanks to structural cost innovation and improved energy efficiency — a detail that sits awkwardly with the narrative of a company crippled by American trade barriers. The US does indeed impose a 50% Section 232 tariff on Korean steel imports, raised from 25% in June 2025 when the Trump administration eliminated all country exemptions. This has reduced POSCO’s access to the American market and contributed to weaker export pricing. But POSCO’s management attributed the broader profit decline to a combination of Chinese oversupply, a sluggish global demand environment, falling mineral prices, and the restructuring-related charges that dominated the bottom line across multiple quarters.
Restructuring and Growth Bets
POSCO Holdings has completed 73 restructuring projects since 2024, generating KRW 1.8 trillion in cash from non-core asset disposals, and plans 55 more through 2028 targeting a further KRW 1 trillion. Those proceeds have funded two strategic bets: lithium and overseas steel. POSCO expects commercial lithium production to begin generating revenue in 2026, with Argentina’s brine project advancing. In steel, the company is building a new electric arc furnace at Gwangyang and pursuing overseas capacity in India through a JSW Group alliance and in North America — where direct production sidesteps the tariff wall entirely.
The balance sheet remains solid: total assets of KRW 105.2 trillion, equity of KRW 62.4 trillion, and operating cash flow of KRW 4.6 trillion. The group’s 2030 ambition — a KRW 200 trillion market capitalisation, roughly triple today’s — depends on lithium achieving meaningful profitability and overseas steel ramping ahead of domestic capacity rationalisation. Chairman Chang In-hwa has framed the restructuring as execution at “overwhelming speed,” but the global trade environment continues to test that ambition.
Shareholder Return in Context
The treasury share programme, combined with the maintained dividend, signals that POSCO prioritises per-share metrics even in a year of compressed earnings. At a KRW 10,000 dividend on earnings per share of KRW 8,697, the payout ratio exceeds 100% of controlling-company profit — sustained by operating cash flow rather than bottom-line earnings. Whether the 2026 profit rebound POSCO is forecasting — driven by lithium revenue, resolved one-off losses and cost discipline in steel — materialises quickly enough to bring the dividend onto a sustainable earnings basis will determine whether the share cancellation programme was strategic foresight or financial engineering on borrowed time.
Sources: Koreatimes, Economic Times
