<POSCO INTERNATIONAL 2Q 2026 Earnings Presentation>
* Date and Time: July 30, 2026, 1:30 p.m. KST
Opening — In-Cheol Chung, Head of Investor Relations
Good afternoon. This is In-Cheol Chung.
We will now begin POSCO INTERNATIONAL's earnings presentation for the second quarter of 2026. The presentation material is available for download in the IR section of our corporate website.
Let me introduce the executives joining us today.
- Kyung Jin Chung, Chief Financial Officer and Senior Executive Vice President, Corporate Strategy & Finance Group
- Young Lak Lee, Director of Incheon Works
- Dong-Youn Kim, Head of Corporate Planning Division
- Jung-Ki Kim, Head of Finance Office
- Young-Il Kim, Head of Mobility Division
- Seon-Kyu Lim, Head of Agribusiness Development Division
- Choul Kwon, Head of Terminal Business Division
- Euy-Yong Hwang, Head of LNG Business Division
- Hong-Ki Yoon, Managing Director, Semi-Finished & Long Products Department
- Yoon Chul Lee, Head of Energy Business Management Department
- Seungmo Kim, Head of E&P Business Management Department
- Sang Won Jung, Head of Investment Management Department 2
- Sung Ho Cho, Director, Low Carbon Energy Business Department
We will begin with opening remarks from our CFO. I will then present second-quarter results, followed by business updates from the executives responsible for each area. We will conclude today’s session with a Q&A.
CFO Opening Remarks — Kyung Jin Chung, CFO and Senior Executive Vice President
Good afternoon. This is Kyung Jin Chung, CFO of POSCO INTERNATIONAL. Thank you for joining us today.
In the first half of the year, geopolitical uncertainty and volatility across global energy markets reinforced the importance of securing reliable LNG supply and high-quality energy assets. Even in this volatile market environment, POSCO International leveraged its diversified and stable business portfolio to achieve record-high quarterly and first-half profits.
To sustain this performance, we continue to strengthen our energy value chain.
Upstream.
We are progressing with Phase 4 development of the Myanmar gas field and preparing to ramp Senex in Australia to full production. We are also reviewing opportunities to secure competitive upstream assets in key regions, including North America, and will continue to expand our LNG value chain by balancing financial returns with strategic fit.
Midstream.
We are broadening the foundation for stable LNG supply through dedicated LNG carrier operations and the expansion of Gwangyang LNG Terminal 2. In the fourth quarter of this year, we plan to receive the first cargo delivered by a dedicated LNG carrier at the Gwangyang Terminal.
Downstream.
Under the MOU on energy cooperation signed with Mongolia's Ministry of Energy, we are developing specific downstream energy opportunities in Mongolia. District heating and renewable energy projects have entered feasibility review and implementation planning, and we intend to raise these initiatives to the government-to-government level to secure the necessary permits and policy support.
Materials.
In Indonesia, we are building an integrated operating system for our palm business while expanding our production base and strengthening value chain competitiveness. On that basis, we expect meaningful earnings growth from the palm business this year.
Critical minerals.
For rare earths and permanent magnets, we are diversifying our global supply chain and establishing an integrated production system through partnerships with companies in the United States, Mongolia and other regions.
Going forward, we will continue to reinforce both our stable earnings base and our future growth engines, and to enhance corporate and shareholder value. In-Cheol Chung and the executives responsible for each segment will now present second-quarter results and key business updates, followed by Q&A. Thank you again for joining us.
2Q 2026 Financial Results — In-Cheol Chung, Head of Investor Relations
I will now walk you through our financial results for the second quarter of 2026. Please turn to page 4.
In the second quarter, POSCO INTERNATIONAL recorded revenue of KRW 9.62 trillion and operating profit of KRW 429 billion, up 18.2% and 36.8% year on year respectively — improvement in both scale and profitability. Operating margin reached 4.5%, up 0.6 percentage points year on year and the highest quarterly operating margin in the company's history.
By business segment, energy business recorded operating profit of KRW 226.4 billion, up 51.6% year on year, driven by the phased production ramp-up at Senex in Australia and a favorable foreign exchange effect at the Myanmar gas field. The materials business recorded operating profit of KRW 205 billion, up 31.8% year on year, supported by the materials-bio business and the Indonesian palm business.
As shown in the chart on the right, borrowings stood at KRW 7.03 trillion at quarter-end, reflecting funding for the acquisition of the Indonesian palm plantation, PT Prime Agri Resources, as well as higher net working capital driven by revenue growth. The net debt-to-equity ratio nonetheless improved to 72.5% from 75.1% in the previous quarter, and our balance sheet remains sound. EBITDA reached KRW 582.7 billion, up 29.8% year on year, underpinning our capacity to fund future growth investment and shareholder returns.
I will now review our key businesses in more detail, starting with energy. Please refer to page 5.
Energy — Upstream
At the Myanmar gas field, sales volume was 42.9 billion cubic feet, broadly flat year on year. Supported by exchange rates, revenue rose 4.8% year on year to KRW 212.0 billion and operating profit rose 6.0% to KRW 148.1 billion. Quarter on quarter, profit increased significantly, reflecting cost recovery recognized on development investment.
Senex maintained strong momentum as the expanded facilities moved into phased ramp-up, with sales volume up 33.8% year on year to 10.7 billion cubic feet. Revenue and operating profit rose 49.4% and 235% respectively, the latter against a low prior-year base.
Energy — Midstream and Downstream
Please turn to the midstream and downstream segments on the right.
In the terminal business, despite lower revenue, operating profit was KRW 11.3 billion, up 13% year on year, reflecting renewed contract terms and cost reduction.
In the power generation business, operating profit increased 118% year on year, supported by lower utilization of baseload capacity — including coal and nuclear — and by optimization of our generation portfolio.
Materials
Page 6 covers the materials business.
Steel trading recorded revenue of KRW 3.91 trillion, up 6.3% year on year. Operating profit was KRW 52.6 billion, reflecting lower gains on cross-currency EUR/USD transactions as the U.S. dollar strengthened against the euro.
The materials-bio business recorded revenue of KRW 2.91 trillion and operating profit of KRW 30.3 billion, up 37.3% and 107.5% year on year respectively, driven by higher thermal coal supply volumes and expanded sales of high-margin products in secondary battery materials.
The EV motor core business recorded operating profit of KRW 10.1 billion, up 47.3% year on year, supported by cost reductions from improved material yield.
The palm business reflected the first full-quarter consolidation of PT Prime Agri Resources, acquired in November last year, together with a modest tailwind from higher CPO prices. On a consolidated basis, the Indonesian palm business recorded revenue of KRW 234.1 billion and operating profit of KRW 76.8 billion, up 145.6% and 91.5% year on year — growth driven primarily by the consolidation effect.
That concludes our overview of second-quarter earnings. From page 8, the executives responsible for each business will provide updates on key initiatives, beginning with the upstream segment, presented by Seungmo Kim, Head of E&P Business Management Department.
Business Update — Upstream | Seungmo Kim, Head of E&P Business Management Department
Good afternoon. This is Seungmo Kim.
Our energy upstream business is focused on stable production and volume growth from existing assets — the Myanmar gas field and Senex in Australia — while pursuing new asset acquisitions in North America and Southeast Asia.
At the Myanmar gas field, Phase 4 facility construction and drilling are progressing on schedule. Since main construction began in July 2024, the facility is 44% complete as of the end of the second quarter of 2026, ahead of the 43.5% plan. Drilling is underway across a total of four production wells, and in the second half we will continue drilling while proceeding with well completion work.
At Senex, we completed the infrastructure for a threefold production expansion at the end of last year and are targeting full run-rate production in 2027. In the first half of this year, additional production wells were brought online, and the water treatment facility was completed in May 2026, expanding treatment capacity. On that basis, we are ramping up natural gas production in phases.
To secure a foundation for future growth, we are also pursuing upstream acquisitions, primarily in North America and Southeast Asia. In North America, we are in discussions regarding producing assets that could secure LNG supply sources and generate trading profits. In Southeast Asia, we are pursuing development assets where we would take operatorship, to build out the LNG value chain and create synergies with POSCO Group companies.
That concludes the upstream update. The midstream terminal update will be presented by Chul Kwon, Head of Terminal Business Division.
Business Update — Midstream Terminal | Chul Kwon, Head of Terminal Business Division
Good afternoon. This is Chul Kwon.
We are strengthening competitiveness across the LNG value chain by expanding LNG infrastructure and trading. Gwangyang LNG Terminal 2 was 96% complete as of the second quarter of 2026 and remains on track for completion by the end of 2026. Once operational, the terminal will allow us to secure stable offtake from captive demand and establish a platform for mid- to long-term growth, while we continue to extend the LNG business into trading, bunkering and adjacent areas.
The LNG trading update will now be presented by Euy-Yong Hwang, Head of LNG Business Division.
Business Update — LNG Trading | Euy-Yong Hwang, Head of LNG Business Division
Good afternoon. This is Euy-Yong Hwang.
In LNG trading, we are capturing opportunities created by heightened global price volatility within defined risk limits and expanding transaction volumes by linking demand within POSCO Group. We established Centrux, our LNG trading subsidiary in Singapore, at the end of last year, and are expanding our procurement portfolio on the basis of a long-term contract with Cheniere in the United States for 400,000 tons per year from 2027 to 2046.
As the CFO noted, the first cargo delivered by a dedicated LNG carrier is scheduled to arrive at the Gwangyang Terminal in the fourth quarter of this year. Building on that milestone, we will continue to grow trading volumes and terminal-linked businesses.
That concludes the midstream update. The downstream segment will be presented by Sang Won Jung, Head of Investment Management Department 2.
Business Update — Downstream | Sang Won Jung, Head of Investment Management Department 2
Good afternoon. This is Sang Won Jung.
Following the energy cooperation MOU signed with Mongolia's Ministry of Energy in June, we are developing specific downstream energy opportunities in the country. District heating and renewable energy projects have entered feasibility review and implementation planning, and we will work to raise them to the government-to-government level in order to secure permits and policy support.
That concludes the downstream update. The Indonesian palm business update will be presented by Seon-Kyu Lim, Head of Agribusiness Development Division.
Business Update — Palm | Seon-Kyu Lim, Head of Agribusiness Development Division
Good afternoon. This is Seon-Kyu Lim. I will cover the integrated operations and growth strategy of our palm business. Please turn to page 9.
In June, the newly acquired palm company was rebranded as Prime Agri Resources. With this acquisition, our local production base expanded to a total of 154,000 hectares, strengthening an integrated value chain that spans seed development, plantation operations, refining and biofuel feedstock supply. As the benefits of the larger production base and in-house seed capability are fully reflected, we expect operating profit from the palm business in 2026 to more than double year on year.
We are also establishing an integrated operating system through post-merger integration. Following completion of the Day 100 PMI program, we transitioned to a locally led execution model in April 2026, put in place a KPI-based performance management framework, and stabilized the local organization. Going forward, we will continue to raise productivity, expand integrated margins and advance the value chain through KPI-based execution — developing the Indonesian palm business into a core earnings driver.
The critical minerals update will now be presented by Young-Il Kim, Head of Mobility Division.
Business Update — Critical Minerals | Young-Il Kim, Head of Mobility Division
Good afternoon. This is Young-Il Kim.
Building a global supply chain for critical minerals, including rare earths, is a top strategic priority for us.
In the United States, we signed an agreement with ReElement, a specialist in rare earth separation and refining, to establish a joint venture. Based on a total investment of USD 200 million, we plan to build a separation and refining facility with annual capacity of up to 6,000 tons, integrated with permanent magnet production.
Separately, in June we signed an MOU with Erdenes Mongolia, Mongolia's state-owned mineral company, covering the development and processing of critical minerals and the establishment of industrial and technology complexes.
Together, these initiatives establish a critical minerals value chain running from raw material sourcing through refining, permanent magnets, motor cores and core assemblies — reducing our dependence on a narrow set of sourcing regions and connecting the chain to our global production network.
That concludes the materials business update.
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Q&A — In-Cheol Chung, Head of Investor Relations
This concludes our briefing on second-quarter 2026 results. We will now open the floor for questions.
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