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POSCO Chemical Turns In its Highest Annual Performance
2022.01.26
- Energy materials business drove growth, with a sales increase of 59.7% YOY.
POSCO Chemical achieved its highest annual performance driven mainly by the growth in the energy materials business.
On January 26, POSCO Chemical announced the financial performance of KRW 1.9895 trillion in turnover, and operating profit of KRW 121.7 billion based on the consolidated profit. Annual turnover grew by 27.0% year-on-year while operating profit increased by 101.9%.
In 2021, POSCO Chemical delivered superb performance in all business areas — energy materials, lime chemicals, and refractories. It has recorded the highest annual turnover in the company history and more than doubled the operating profit, improving the profitability tremendously.
In the energy materials business, increased sales were led by high-nickel cathodes for EV batteries. The price hike in raw materials, such as lithium and nickel, was also reflected in the sales price, raising the sales by 59.7% from last year to KRW 851.8 billion.
This is a 289% growth compared to KRW 219 billion in 2019 when POSCO Chemical merged with POSCO ESM and began the cathode business. The share of turnover in cathodes from the entire business also rose from 14.8% to 42.8% in two years, further driving growth.
The lime chemical business recorded KRW 675.3 billion in turnover up by 16.4% from the previous year as the increase in crude steel production improved sales of lime (quicklime) products and oil prices pushed up the unit sales price of products including coal tar and light oil. Refractories turnover rose slightly from the year before to KRW 462.5 billion.
PMC Tech, a POSCO Chemical subsidiary that produces needle cokes, a raw material for electrode rods and artificial graphite anode materials, saw a 53.7% increase in sales figures to KRW 172.4 billion and 22.1% growth in operating profit thanks to the rise in product demand as the utilization rate for electric furnaces improved.
Despite the increased investment in both cathode and anode businesses, the debt ratio fell by 43.1%p from 104.0% last year to 60.9% as a result of successful paid-in capital increase. POSCO Chemical also strengthened its financial soundness by boosting cash holdings to KRW 1.3512 trillion.
As demand for battery materials is expected to surge along with the growth of the EV market, demand for next-generation materials is also anticipated to remain high as the industry strives to increase mileage. POSCO Chemical plans to bolster its technical leadership by boosting production capacity and conducting R&D in response to the evolving market.
In May, POSCO Chemical will complete construction of the new cathode plant in Gwangyang, the largest such plant in the world with an annual capacity of 90,000 tons. The company will also build new cathode plants and expand the existing facilities in North America, China, and Pohang as a new basis for global production. For anode materials, the production facility for low-expansion natural graphite will be expanded. Artificial graphite anodes will also be produced in full scale to diversify the product portfolio. This year, POSCO Chemical will secure an annual production capacity of 105,000 tons for cathodes, and 84,000 tons for anodes.
The company aims to develop diverse products that meet the needs of global EV and battery manufacturers including high-nickel single-particle cathode materials, Co-free cathode materials, and artificial graphite anode materials made using cheaper raw materials. By introducing enhanced process technology with increased productivity, POSCO Chemical will raise its cost competitiveness.
Having become the first battery-materials manufacturer in Korea to acquire the certificate from the Ministry of Environment for the anode production process last year, POSCO Chemical will also earn another certificate for cathode materials. Furthermore, the company is set to strengthen its ESG management by securing transparency and reliability in the supply chain for battery materials, thereby enhancing its competitiveness across the entire value chain from raw materials to production.
(Unit: KRW 100 million)
|
Category |
2021 |
2020 |
YoY Growth |
|
Turnover |
19,895 |
15,662 |
27.0% |
|
Operating Profit |
1,217 |
603 |
101.9% |
|
Operating Margin |
6.1% |
3.8% |
2.3%p |
|
Net Profit |
1,338 |
297 |
350.5% |
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