TABLE OF CONTENTS
GLOSSARY
PART I
ITEM 1.
ITEM 2.
ITEM 3.
ITEM 4.
ITEM 5.
ITEM 6.
ITEM 7.
ITEM 8.
ITEM 9.
THE OFFER AND LISTING
Item 9.A.
Offer and Listing Details
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Item 9.B.
Plan of Distribution
Item 9.C.
Markets
Item 9.D.
Selling Shareholders
Item 9.E.
Dilution
Item 9.F.
Expenses of the Issuer
ITEM 10.
ITEM 11.
ITEM 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
ITEM 13.
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
ITEM 14.
ITEM 15.
CONTROLS AND PROCEDURES
ITEM 16.
Item 16.I.
Item 16.J.
Item 16.K.
ITEM 17.
ITEM 18.
ITEM 19.
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“ADR”
“ADR depositary”
“ADS”
“Commercial Code”
“common stock”
“Consolidated Financial Statements”
“deposit agreement”
“U.S. dollars,” “$” or “US$”
“FSCMA”
“Government”
“Gwangyang Works”
“IASB”
“IFRS”
“IFRS as issued by the IASB”
“Korea”
“K-IFRS”
“Pohang Works”
“POSCO Group”
“Securities Act”
“Securities Exchange Act”
“SEC”
“tons”
“U.S. GAAP”
“We”
“Won” or “W”
“Yen”
“Yuan”
Any discrepancies in any table between totals and the sums of the amounts listed are due to rounding.
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Item 1. Identity of Directors, Senior Managers and Advisers
Item 1.A. Directors and Senior Management
Not applicable
Item 1.B. Advisers
Item 1.C. Auditor
Item 2. Offer Statistics and Expected Timetable
Item 2.A. Offer Statistics
Item 2.B. Method and Expected Timetable
Item 3. Key Information
Item 3.A. [Reserved]
Item 3.B. Capitalization and Indebtedness
Item 3.C. Reasons for Offer and Use of Proceeds
Item 3.D. Risk Factors
You should carefully consider the risks described below.
The global economic downturn may adversely affect our business and performance. The global economic outlook for the near future remains uncertain.
Our business is affected by highly cyclical market demand for our products and services. In particular, POSCO and our other subsidiaries that engage in steel production activities are affected by market demand from a number of industries, including the construction, automotive, shipbuilding and electrical appliances industries as well as downstream steel processors, which are sensitive to general conditions in the global economy. Macroeconomic factors, such as the economic growth rate, employment levels, interest rates, inflation rates, exchange rates, commodity prices, demographic trends and fiscal policies of governments can have a significant effect on such industries. From time to
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time, these industries have experienced significant and sometimes prolonged downturns, which in turn have negatively impacted our steel business. Global economic conditions have deteriorated in recent years, with global financial and capital markets experiencing substantial volatility. In particular, the COVID-19 pandemic that began in late 2019 and rapid increases in interest rates globally starting in the second half of 2021 to combat inflation have materially and adversely affected the global economy and financial markets. See “— Earthquakes, tsunamis, floods, severe health epidemics (including the occurrence of widespread infectious diseases such as the global COVID-19 pandemic) and other natural calamities could materially and adversely affect our business, results of operations or financial condition.” Such uncertainties have been caused by, and continue to be exacerbated by, among other things, deterioration in economic and trade relations between major economies (particularly between the United States and China), the outbreak of the Russia-Ukraine war in February 2022 and the military conflicts between Iran and other countries, including the United States and Israel, that have destabilized the global energy sector, the slowdown of economic growth in China and other major emerging market economies, adverse economic and political conditions in Europe and Latin America, continuing geopolitical and social instability in North Korea and various parts of the Middle East, and impositions of tariffs and other trade protective measures around the world. See “— Korea and the rest of Asia are our most important markets, and our current business and future growth could be materially and adversely affected if economic conditions in the region deteriorate.”
Actual or anticipated further deterioration of global economic conditions may result in a decline in demand for our products. In the case of a prolonged decrease in demand (which may occur or be exacerbated as a result of tariffs imposed on imports into our major export markets), we may need to rationalize our production capacity and reduce fixed costs, and we will likely face pressure to reduce prices of our products. From time to time, we have adjusted our crude steel production levels and sales prices in response to sluggish demand from our customers in industries adversely impacted by the deteriorating economic conditions. We decreased our aggregate production level from 39.9 million tons in 2023 to 39.3 million tons in 2024 and to 38.6 million tons in 2025 in response to weak global economic conditions. During such periods, the weighted average unit sales price for our semi-finished and finished steel products produced by us and directly sold to external customers decreased from Won 1,272,754 per ton in 2023 to Won 1,217,705 per ton in 2024 and Won 1,159,315 per ton in 2025 primarily reflecting general deterioration of the global steel market conditions, which was partially offset by general depreciation of the Won against the U.S. dollar that increased our export prices in Won terms.
Such weakening demand and a general oversupply in the market have negatively impacted our results of operations in 2024 and 2025. Our revenue decreased by 4.7%, or Won 3,597 billion, from Won 77,057 billion in 2023 to Won 73,459 billion in 2024, and our profit decreased by 45.6%, or Won 841 billion, from Won 1,846 billion in 2023 to Won 1,005 billion in 2024. Our revenue decreased by 6.1%, or Won 4,472 billion, from Won 73,459 billion in 2024 to Won 68,987 billion in 2025, and our profit decreased by 47.6%, or Won 478 billion, from Won 1,005 billion in 2024 to Won 527 billion in 2025.
We expect fluctuation in demand for our steel products and trading services to continue at least in the near future. We may decide to further adjust our future crude steel production or our sales prices on an ongoing basis subject to market demand for our products, the production outlook of the global steel industry and global economic conditions in general. In addition, economic downturns in the Korean and global economies could result in market conditions characterized by weaker demand for steel products from a number of industries as well as falling prices for export and import products and reduced trade levels. Deterioration of market conditions may result in changes in assumptions underlying the carrying value of certain assets, which in turn could result in impairment of such assets, including intangible assets such as goodwill. Our ability to reduce expenditures for production facilities and research and development during an industry downturn is limited because of the need to maintain our competitive position. If we are unable to reduce our expenses sufficiently to offset reductions in
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price and sales volume, our margins will suffer and our business, financial condition and results of operations may be materially and adversely affected.
We operate in the highly competitive steel, trading, construction and energy industries, and our failure to successfully compete would adversely affect our market position and business.
Steel Segment. Our subsidiaries that produce steel products, including POSCO, our wholly-owned subsidiary, operate in the highly competitive steel industry and face intense global competition. China is the largest steel-producing country in the world by a significant margin, with the balance between its domestic production and demand being an important factor in the determination of global steel prices. In recent years, a slowdown in domestic demand for steel products in China, resulting from slowed economic growth as well as the impact from the COVID-19 pandemic, combined with an expansion in steel production capacity, has led to production over-capacity in the Chinese steel industry, which in turn has led the Chinese government to pursue aggressive consolidation in the Chinese steel industry that has resulted in fewer but larger steel manufacturers that are able to compete more effectively in the global steel industry. Competition from such global steel manufacturers with expanded production capacity as well as competitors from emerging markets, especially from China and India, has resulted in significant price competition and may result in declining margins and reductions in revenue in the future. POSCO’s larger competitors may use their resources, which may be greater than POSCO’s, against POSCO in a variety of ways, including by making additional acquisitions, investing more aggressively in product development and capacity and displacing demand for our export products.
Increased production capacity, combined with decreased demand resulting from a slowdown of the global economy, has from time to time resulted in production over-capacity in the global steel industry which in turn has resulted in downward pressure on global steel prices. In 2023, 2024 and 2025, global demand for steel products remained weak reflecting general deterioration of the global steel market conditions. Production over-capacity in the global steel industry may further intensify if global economic recovery slows or demand from developing countries, particularly from China, continues to lag behind the growth in production capacity. Production over-capacity in the global steel industry is likely to:
reduce export prices in U.S. dollar terms of our principal products, which in turn may reduce our sales prices in Korea as well;
increase competition in the Korean market as foreign producers seek to export steel products to Korea as other markets experience a slowdown;
negatively affect demand for our products abroad and our ability to expand export sales; and
affect our ability to increase steel production in general.
Steel also competes with other natural and synthetic materials that may be used as steel substitutes, such as aluminum, cement, composites, glass, plastic and wood. Government regulatory initiatives mandating the use of such materials instead of steel, whether for environmental or other reasons, as well as the development of attractive alternative substitutes for steel products, may reduce demand for steel products and increase competition in the global steel industry.
As part of our strategy to compete in this challenging landscape, our steel subsidiaries will continue to invest in developing innovative products that offer the greatest potential returns and enhance the overall quality of our products, as well as make additional investments in the development of new manufacturing technologies. However, there is no assurance that they will be able to continue to compete successfully in this economic environment or that the prolonged slowdown of the global economy or production over-capacity will not have a material adverse effect on our business, results of operations or financial condition.
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Trading Segment of the Infrastructure Business. POSCO INTERNATIONAL Corporation (“POSCO INTERNATIONAL”), our consolidated subsidiary, competes principally with other Korean general trading companies that are affiliated with major domestic business groups, as well as global trading companies based in other countries. In the domestic market, competition for export transactions on behalf of domestic suppliers and import transactions on behalf of domestic purchasers was historically limited, as most affiliated general trading companies of large Korean business groups generally relied on affiliate transactions for the bulk of their trading business. However, many of these Korean general trading companies have reduced their reliance on their affiliated business group and transactions carried out on behalf of their member companies and instead have generally evolved to focus on segments of the import and export markets in which they have a competitive advantage. As a result, competition among Korean general trading companies in the area of traditional trade has become more intense.
The overseas trading markets in which POSCO INTERNATIONAL operates are also highly competitive. POSCO INTERNATIONAL’s principal competitors in overseas trading markets include Korean trading companies that operate in various international markets, as well as foreign trading companies, particularly those based in Japan. As POSCO INTERNATIONAL diversifies into businesses other than traditional trading such as natural resources development, it also increasingly competes with other Korean and international companies involved in these businesses. Some of POSCO INTERNATIONAL’s competitors may be more experienced and have greater financial resources and pricing flexibility than POSCO INTERNATIONAL, as well as more extensive global networks and wider access to customers. There is no assurance that POSCO INTERNATIONAL will be able to continue to compete successfully in this economic environment or that the prolonged slowdown of the global economy will not have a material adverse effect on our business, results of operations or financial condition.
On January 1, 2023, POSCO Energy Corporation (“POSCO Energy”), Korea’s largest domestic private power utility company and a provider of alternative environmentally-friendly energy solutions, merged into POSCO INTERNATIONAL. POSCO INTERNATIONAL’s power generation business competes principally with private-sector power generation companies in Korea that are affiliated with major domestic business groups, including SK Innovation Co., Ltd. and GS EPS Co., Ltd.
Construction Segment of the Infrastructure Business. POSCO Eco & Challenge Co., Ltd. (“POSCO E&C” and formerly known as POSCO Engineering & Construction Co., Ltd.), our consolidated subsidiary, operates in the highly competitive construction industry. Competition is based primarily on price, reputation for quality, reliability, punctuality and financial strength of contractors. Intense competition among construction companies may result in, among other things, a decrease in the price POSCO E&C can charge for its services, difficulty in winning bids for construction projects, an increase in construction costs and difficulty in obtaining high-quality contractors and qualified employees.
In Korea, POSCO E&C’s main competition in the construction of residential and non-residential buildings, engineering, procurement and construction (“EPC”) projects, urban planning and development projects and civil works projects consists of approximately ten major domestic construction companies, many of which are member companies of other large business groups in Korea and are capable of undertaking larger-scale, higher-value-added projects that offer greater potential returns. A series of measures introduced by the Government over the past several years to regulate housing prices in Korea, as well as increasing popularity of low-bid contracts in civil works project mandates, have contributed to increased competition in the Korean construction industry in recent years.
Competition for new project awards in overseas markets is also intense. In these markets, POSCO E&C faces competition from local construction companies and other major Korean construction companies with overseas operations, as well as international construction companies from other countries. Construction companies from other developed countries may be more experienced,
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have greater financial resources and possess more sophisticated technology than POSCO E&C, while construction companies from developing countries often have the advantage of lower wage costs. Some of these competitors have achieved higher market penetration than POSCO E&C has in specific markets in which it competes, and POSCO E&C may need to accept lower margins in order for it to compete successfully against them. POSCO E&C’s failure to successfully compete in the domestic or overseas construction markets could adversely affect its market position and our results of operations and financial condition.
Logistics and Others Segment of the Infrastructure Business. POSCO DX Co., Ltd. (“POSCO DX” and previously named POSCO ICT Co., Ltd.) competes principally with system integration service providers in Korea that are affiliated with major domestic business groups, including Samsung SDS Co., Ltd., LG CNS Co., Ltd. and SK Inc. AX. POSCO FLOW Co., Ltd. (“POSCO FLOW”) competes principally with logistics service providers in Korea that are affiliated with major domestic business groups, including Hyundai Glovis Co., Ltd., Samsung SDS Co., Ltd. and LX Pantos Co., Ltd.
Rechargeable Battery Materials Segment. In the energy materials market, POSCO Future M Co., Ltd. (“POSCO Future M” and previously named POSCO Chemical Co., Ltd.) competes with other global leading manufacturers of cathode and anode materials, including LG Chemical Co., Ltd. and Ecopro BM Co., Ltd. Global demand for electric vehicles has decreased in recent years, which in turn has decreased demand for cathode and anode materials from our key customers. In part due to a slowdown of the rechargeable battery industry, POSCO Pilbara Lithium Solution Co., Ltd. (“POSCO Pilbara Lithium Solution”), a subsidiary in which we hold a 82% interest that engages in the production of lithium hydroxide, recognized an inventory impairment loss of Won 56 billion in 2024. In addition, POSCO Argentina SAU (“POSCO Argentina”), our wholly-owned subsidiary that also engages in the production of lithium hydroxide, recognized an inventory impairment loss of Won 53 billion in 2024. In its legacy business areas of refractories and lime chemicals, POSCO Future M competes principally with Chosun Refractories ENG Co., Ltd. and Korea Refractories Co., Ltd.
Korea and the rest of Asia are our most important markets, and our current business and future growth could be materially and adversely affected if economic conditions in the region deteriorate.
We are a holding company incorporated in Korea, and a substantial portion of our subsidiaries’ operations and assets are located in Korea. Domestic demand for steel products is affected by the condition of major steel consuming industries, such as construction, shipbuilding, automotive, electrical appliances and downstream steel processors, and the Korean economy in general. In addition, the trading operations of POSCO INTERNATIONAL are affected by the general level of trade between Korea and other countries, which in turn tends to fluctuate based on general conditions in the Korean and global economies. As a result, we are subject to political, economic, legal and regulatory risks specific to Korea, and our performance and successful fulfillment of our operational strategies are largely dependent on the overall Korean economy.
Following a period of deterioration due to the debilitating effects of the COVID-19 pandemic on the Korean economy as well as on the economies of Korea’s major trading partners in 2020, the overall Korean economy showed signs of recovery in 2021. However, adverse conditions and volatility in the worldwide financial markets, fluctuations in oil and commodity prices, supply chain disruptions and the increasing weakness of the global economy, as well as significant fluctuations in policy interest rates globally (including Korea), have contributed to the uncertainty of global economic prospects in recent years and have adversely affected, and may continue to adversely affect, the Korean economy. The value of the Won relative to major foreign currencies, in particular the U.S. dollar, has fluctuated significantly and, as a result of uncertain global and Korean economic, social and political conditions, there has been significant volatility in the stock prices of Korean companies recently. Future declines in the Korea Composite Stock Price Index (the “KOSPI”), and large amounts of sales of Korean securities
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by foreign investors and subsequent repatriation of the proceeds of such sales may adversely affect the value of the Won, the foreign currency reserves held by financial institutions in Korea, and the ability of Korean companies to raise capital. Any future deterioration of the Korean or global economy could adversely affect our business, financial condition and results of operations.
Other developments that could have an adverse impact on Korea’s economy include:
declines in consumer confidence and a slowdown in consumer spending;
rising inflationary pressures leading to increases in costs of goods and services and a decrease in purchasing power;
hostilities or political or social tensions involving countries in the Middle East (including those resulting from the hostilities in the Middle East following the Israel-Hamas war and the military conflicts between Iran and other countries, including the United States and Israel) and Northern Africa and any material disruption in the global supply of oil or sudden increase in the price of oil;
hostilities or political or social tensions involving Russia (including the Russia-Ukraine war and the ensuing actions against Russia) and any resulting adverse effects on the global supply of oil and other natural resources or the global financial markets;
adverse conditions or developments in the economies of countries and regions that are important export markets for Korea, such as China, the United States, Europe and Japan, or in emerging market economies in Asia or elsewhere, including as a result of the deterioration of economic and trade relations among such countries (including escalations of tariffs) and increased uncertainties in the global financial markets and industry;
the imposition of significant tariffs on Korea’s exports by any of Korea’s major export markets;
adverse changes or volatility in foreign currency reserve levels, interest rates, inflation rates, commodity prices (including oil prices), exchange rates (including fluctuation of the U.S. dollar, Euro or Japanese Yen exchange rates or revaluation of the Chinese Yuan) or stock markets;
the occurrence of severe health epidemics in Korea or other parts of the world;
political uncertainty or increasing strife among or within political parties in Korea following the declaration of martial law by former President Yoon Suk-yeol in December 2024 that led to his impeachment and subsequent removal in April 2025 and the election of Mr. Lee Jae-myung as President in June 2025;
deterioration in economic or diplomatic relations between Korea and its trading partners or allies, including deterioration resulting from territorial or trade disputes or disagreements in foreign policy;
the economic impact of any pending or future free trade agreements or of any changes to existing free trade agreements;
increased sovereign default risks in select countries and the resulting adverse effects on the global financial markets;
deterioration in the financial condition or performance of small- and medium-sized enterprises and other companies in Korea;
investigations of large Korean business groups and their senior management for possible misconduct;
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continuing rise in the level of household debt and increasing delinquencies and credit defaults by retail and small- and medium-sized enterprise borrowers in Korea;
shortages of imported raw materials, natural resources, rare earth minerals or component parts due to disruptions to the global supply chain;
social and labor unrest;
substantial changes in the market prices of Korean real estate;
a substantial decrease in tax revenues and a substantial increase in the Government’s expenditures for fiscal stimulus measures, unemployment compensation and other economic and social programs, which, would likely lead to a national budget deficit as well as an increase in the Government’s debt;
financial problems or lack of progress in the restructuring of Korean business groups, other large troubled companies, their suppliers or the financial sector;
loss of investor confidence arising from corporate accounting irregularities or corporate governance issues concerning certain Korean companies;
increases in social expenditures to support an aging population in Korea or decreases in economic productivity due to the declining population size in Korea;
a continued decrease in the population and birthrates in Korea;
geopolitical uncertainty and the risk of further attacks by terrorist groups around the world;
natural or man-made disasters that have a significant adverse economic or other impact on Korea or its major trading partners; and
an increase in the level of tensions or an outbreak of hostilities between North Korea and Korea or the United States.
We rely on export sales for a significant portion of our total sales. Adverse economic and financial developments in Asia in the future may have an adverse effect on demand for our products in Asia and increase our foreign exchange risks.
We rely on export sales for a significant portion of our total sales. In particular, the Steel Segment’s export sales and overseas sales to customers abroad accounted for 61.7% of the Steel Segment’s total revenue in 2025. The Steel Segment’s export sales to customers in Asia, including China, Japan, Indonesia, Thailand and Malaysia, accounted for 52.5% of the Steel Segment’s total export sales revenue in 2025, and we expect our sales to these countries to remain important in the future. In particular, the Steel Segment’s export sales to Asia (other than China and Japan) accounted for 22.5% of the Steel Segment’s total export sales revenue in 2025. Accordingly, adverse economic and financial developments in these countries may have an adverse effect on demand for our products. Unfavorable or uncertain economic and market conditions can be caused by, among other factors, difficulties in the financial sector, corporate, political or other scandals that may reduce confidence in the markets, declines in business confidence, increases in inflation, natural disasters or pandemics and outbreaks of hostilities or other geopolitical instability. Deterioration in economic or diplomatic relations between Korea and its trading partners or allies, including deterioration resulting from territorial or trade disputes or disagreements in foreign policy, or a combination of these or other factors, has in the past adversely affected, and may in the future adversely affect, demand for our products.
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Economic weakness in Asia may also adversely affect our sales to the Korean companies that export to the region, especially companies in the construction, shipbuilding, automotive, electrical appliances and downstream steel processing industries. Weaker demand in these countries, combined with an increase in global production capacity, may also reduce export prices in U.S. dollar terms of our principal products sold to customers in Asia. For a discussion of production over-capacity in the global steel industry, see “— We operate in the highly competitive steel, trading, construction and energy industries, and our failure to successfully compete would adversely affect our market position and business.” We attempt to maintain and expand our export sales to generate foreign currency receipts to cover our foreign currency purchases and debt service requirements. Consequently, any decrease in our export sales could also increase our foreign exchange risks.
Depreciation of the value of the Won against the U.S. dollar and other major foreign currencies may have a material adverse effect on the results of our operations and on the price of the ADSs.
Our consolidated financial statements are prepared from our local currency denominated financial results, assets and liabilities and our subsidiaries around the world, which are then translated into Won. A substantial proportion of our consolidated financial results is accounted for in currencies other than the Won. Accordingly, our consolidated financial results and assets and liabilities may be materially affected by changes in the exchange rates of foreign currencies. In 2025, 61.7% of the Steel Segment’s total revenue was from overseas markets outside of Korea. To the extent that we incur costs in one currency and make sales in another, our profit margins may be affected by changes in the exchange rates between the two currencies. Since the currency in which sales are recorded may not be the same as the currency in which expenses are incurred, foreign exchange rate fluctuations may materially affect our results of operations. Depreciation of the Won may materially affect the results of our operations because, among other things, it causes:
an increase in the amount of Won required for us to make interest and principal payments on our foreign currency-denominated debt;
an increase in Won terms in the costs of raw materials and equipment that we purchase from overseas sources and a substantial portion of our freight costs, which are denominated primarily in U.S. dollars; and
foreign exchange translation losses on foreign currency-denominated liabilities, which lower our earnings for accounting purposes.
Appreciation of the Won against major currencies, on the other hand, causes:
our export products to be less competitive by raising our prices in U.S. dollar, Yen and Yuan terms; and
a reduction in net sales and accounts receivables in Won from export sales, which are primarily denominated in U.S. dollars and to a lesser extent in Yen and Yuan.
The overall net impact from fluctuations of the Won against major currencies is difficult to estimate and varies from year to year. We strive to naturally offset our foreign exchange risk by matching foreign currency receivables with our foreign currency payables and our overseas subsidiaries have sought to further mitigate the adverse impact of exchange rate fluctuations by conducting business transactions in the local currency of the respective market in which the transactions occur. In particular, POSCO INTERNATIONAL’s exposure to fluctuations in exchange rates, including the Won/U.S. dollar exchange rate, is limited because trading transactions typically involve matched purchase and sale contracts, which result in limited settlement exposure, and because POSCO INTERNATIONAL’s contracts with domestic suppliers of products for export and with domestic purchasers of imported products are generally denominated in U.S. dollars. Although the
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impact of exchange rate fluctuations is partially mitigated by such strategies, we and our subsidiaries, particularly POSCO INTERNATIONAL and POSCO E&C, also periodically enter into derivative contracts, primarily foreign currency swaps and forward exchange contracts, to further hedge some of our foreign exchange risks. However, our results of operations have historically been affected by exchange rate fluctuations and there can be no assurance that such strategies will be sufficient to reduce or eliminate the adverse impact of such fluctuations in the future.
Fluctuations in the exchange rate between the Won and the U.S. dollar will also affect the U.S. dollar equivalent of the Won price of the shares of our common stock on the KOSPI Market and, as a result, will likely affect the market price of the ADSs. These fluctuations will also affect the U.S. dollar conversion by the depositary for the ADRs of cash dividends, if any, paid in Won on shares of common stock represented by the ADSs.
We are dependent on imported raw materials, and significant increases in market prices of essential raw materials could adversely affect our margins and profits.
We purchase substantially all of the principal raw materials we use from sources outside Korea, including iron ore and coal. POSCO imported approximately 49 million dry metric tons of iron ore and 24 million wet metric tons of coal in 2025. Iron ore is sourced primarily from Australia, Brazil and Canada. Coal is sourced primarily from Australia, Canada and the United States. Supply disruptions, which could be caused by political or other events in the countries from which we import these materials, could adversely affect our operations. In addition, we are particularly exposed to increases in the prices of coal, iron ore and nickel, which represent the largest components of our cost of goods sold. The prices of our key raw materials have fluctuated significantly in recent years. For example, the average market price of iron ore per dry metric ton (Iron Ore 62% Fe, CFR China Index announced by Platts) was US$120 in 2023, US$109 in 2024 and US$102 in 2025. The average market price of coal per wet metric ton (Premium Low Vol Coking Coal, FOB Australia Index announced by Platts) was US$296 in 2023, US$240 in 2024 and US$188 in 2025. Such fluctuations in the price of coal in recent years were in large part attributable to sanctions imposed on Russia, a large exporter of coal, following its invasion of Ukraine in February 2022.
Our long-term supply contracts generally have terms of three to ten years and provide for periodic price adjustments to the then-market prices. We typically adjust the prices on a quarterly basis and maintain approximately one month of inventory of raw materials. Such price adjustments are driven by various factors, including the global economic outlook, global market prices of raw materials and steel products, supply and demand outlook of raw materials and production costs of raw materials. For both coal and iron ore, we typically agree on the purchase price with the suppliers primarily based on the spot market price periodically announced by Platts (Premium Low Vol Coking Coal, FOB Australia Index and Iron Ore 62% Fe, CFR China Index). As of December 31, 2025, 48 million tons of iron ore and 26 million tons of coal remained to be purchased under long-term supply contracts. Future increases in prices of our key raw materials and our inability to pass along such increases to our customers could adversely affect our margins and profits. Increased prices may also cause potential customers to defer purchase of steel products, while rapidly falling prices may increase loss on valuation of raw material inventory purchased when prices were higher, either of which could have an adverse effect on our business, financial condition and results of operations.
Expansion of our operations abroad is important to our long-term success, and our limited experience in the operation of our business outside Korea increases the risk that our international expansion efforts will not be successful.
We conduct steel, international trading, construction and energy operations abroad, and our business relies on a global trading network comprised of overseas subsidiaries, branches and representative offices. Although many of our subsidiaries and overseas branches are located in developed countries, we also operate in numerous countries with developing economies. In addition,
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we intend to continue to expand our production operations internationally by carefully seeking out investment opportunities in regions that we believe offer promising growth prospects, including the United States and India. For example, we plan to (1) make investments alongside Hyundai Motor Group for the joint development and construction of an electric arc furnace steel mill in Louisiana, United States, (2) make investments alongside JSW Steel Limited to jointly construct an integrated steel mill in Odisha, India and (3) acquire a 30% equity interest in joint venture that will hold interests in certain lithium mining assets of Mineral Resources Ltd. in Australia. We may enter into additional joint ventures with foreign companies that would enable us to rely on these businesses to conduct our operations, establish local networks and coordinate our sales and marketing efforts abroad. To the extent that we enter into these arrangements, our success will depend in part on the willingness of our partner companies to dedicate sufficient resources to their partnership with us, as well as our financial capacity to support such arrangements.
In other situations, we may decide to establish manufacturing facilities by ourselves instead of relying on partners. The demand and market acceptance for our products produced abroad are subject to a high level of uncertainty and are substantially dependent upon global market conditions. We cannot assure you that our international expansion plan will be profitable or that we can recoup the costs related to such investments.
Expansion of our operations abroad requires management attention and resources. In addition, we face additional risks associated with our expansion outside Korea, including:
changes in international and domestic political and economic conditions as well as social conditions;
challenges caused by distance, language, local business customs and cultural differences;
local labor relation issues which could lead to significant work stoppages and labor unrest;
higher costs associated with doing business internationally;
legal and regulatory restrictions, including foreign exchange controls that might prevent us from repatriating cash earned in countries outside Korea;
longer payment cycles in some countries;
credit risk and higher levels of payment fraud;
currency exchange risks;
potentially adverse tax consequences; and
seasonal reductions in business activity during the summer months in some countries.
We have limited insurance coverage and may incur significant losses resulting from operating hazards, product liability claims from customers or business interruptions.
The normal operation of our manufacturing facilities may be interrupted by accidents caused by operating hazards, power supply disruptions and equipment failures, as well as natural disasters. For example, we experienced significant losses related to flooding caused by Typhoon Hinnamnor in September 2022. See “— Earthquakes, tsunamis, floods, severe health epidemics (including the occurrence of widespread infectious diseases such as the global COVID-19 pandemic) and other natural calamities could materially and adversely affect our business, results of operations or financial condition.” As with other industrial companies, our operations involve the use, handling, generation, processing, storage, transportation and disposal of hazardous materials, which may result in fires, explosions, spills and other unexpected or dangerous accidents causing property damage as well as personal injuries or death. We are also exposed to risks associated with product liability claims in the
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event that the use of the products we sell results in injury. We maintain property insurance for our property, plant and equipment that we believe to be consistent with market practice. However, we may not have adequate resources to satisfy a judgment in excess of our insurance coverage in the event of a successful claim against us. Any occurrence of accidents or other events affecting our operations could result in potentially significant monetary damages, diversion of resources, production disruption and delay in delivery of our products, which may have a material adverse effect on our business, financial condition and results of operations.
Impositions of anti-dumping duties, safeguard duties, countervailing duties, quotas or tariffs may have an adverse impact on our export sales.
Our subsidiaries sell a significant portion of their products outside Korea as well as engage in trading activities worldwide, and, from time to time, we are involved in trade remedy proceedings in various jurisdictions. We actively participate in such proceedings to minimize adverse effects and related risks. Although trade remedy actions and regulatory scrutiny have increased in recent years, such cases have historically been limited in scope relative to our overall global sales and operations. Through our trade affairs office, we continue to closely monitor developments in trade remedy policies, including anti-dumping duties, safeguard duties, countervailing duties, quotas and tariffs, in all major markets in which we operate, and seek to mitigate related risks by adjusting supply chains, production and export arrangements and, where necessary, defend our interests. However, there can be no assurance that free trade agreements between Korea and its major trading partners will remain unchanged, or that new or increased anti-dumping duties, safeguard duties, countervailing duties, quotas or tariffs will not be imposed on our products in the future. The occurrence of any such events, including those described below, may have a material adverse effect on our business, financial condition and results of operations.
In February 2025, the President of the United States removed certain country-specific exemptions, including those applicable to the Republic of Korea, reinstating a 25% tariff on steel imports and increasing tariffs on aluminum imports to 25%, effective March 2025. In June 2025, these tariffs were further increased from 25% to 50%. U.S. tariff policies remain subject to change, and tariffs applicable to Korean-origin products have fluctuated over time and may be increased or decreased in the future. Furthermore, other countries have implemented, and may continue to implement, retaliatory tariffs or other trade restrictions in response to U.S. trade actions. For a discussion of our export sales and overseas sales to customers in North America, which includes the United States and Canada, see “Item 4. Information on the Company — Item 4.B. Business Overview — Steel Segment – Markets – Exports.”
While our direct exports to customers in the United States represent a limited portion of our total sales, such measures may materially affect our downstream customers that manufacture finished products using our products in countries subject to such tariffs and export those products to the United States or other markets subject to similar trade measures. Increases in tariffs or other trade barriers applicable to products manufactured by our downstream customers may lead to higher prices, reduced competitiveness or lower end-market demand, which may in turn adversely affect demand for our products.
Historically, tariffs have led to increased trade and political tensions. In response to the recent tariffs imposed by the U.S. government, various countries have implemented, or have announced plans to implement, retaliatory tariffs on goods produced in the United States. These retaliatory measures, along with the broader trend of unilateral trade actions, could trigger a cycle of trade disputes. Such political and economic tensions as a result of trade policies could reduce trade volume, investment, technological exchange and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets. Consequently, there can be no assurance that our proactive mitigation measures will be sufficient to offset the risks of evolving trade policies. If further tariffs are imposed on
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a broader range of our exports or our customers’ exports, or if further retaliatory trade measures are adopted by affected countries, we or our customers may be required to adjust pricing, modify supply or sourcing arrangements or incur additional costs, any of which may have a material adverse impact on our business, financial condition and results of operations.
Our rechargeable battery materials business is affected by market conditions in the highly cyclical rechargeable battery industry, and the key customers of such business are substantially affected by government incentives. Significant decrease in such incentives has and will likely continue to have a material adverse effect on our rechargeable battery materials business.
POSCO Future M engages in the manufacturing and sale of cathode and anode materials, which are two of the main components of rechargeable batteries. In addition, we engage in natural resources development and production of lithium hydroxide and lithium carbonate. We sell our rechargeable battery materials primarily to electric vehicle battery manufacturers in Korea and abroad. Accordingly, our rechargeable battery materials business is affected by market conditions in the highly cyclical rechargeable battery industry. The industry’s cyclicality results primarily from fluctuations in demand for the end products that use rechargeable batteries, particularly from the electric vehicle industry, which are sensitive to general conditions in the global economy and the level of incentives provided to the purchasers of electric vehicles.
Key customers of our rechargeable battery materials business are also impacted by certain government incentives, including grants, subsidies and tax credits. For example, in July 2025, the United States enacted legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”), which repealed or curtailed certain consumer-facing electric vehicle incentives that had been previously available while preserving other incentives, including the advanced manufacturing production credit (“AMPC”) available for battery production and sale in the United States and investment tax credits available to purchasers of certain energy storage technology in the United States. In particular, the legislation eliminated consumer-facing electric vehicle tax credits for vehicles acquired after September 30, 2025, which may adversely affect demand for electric vehicles in the United States, which could in turn reduce demand for our rechargeable battery products.
In addition, the AMPC, while currently available, is scheduled to begin phasing down from 2030 and will be progressively reduced through its expiration in 2032. Furthermore, the OBBBA introduced the “prohibited foreign entity” framework, which disallows the AMPC and other tax credits to battery manufacturers who are prohibited foreign entities or who receive “material assistance” from prohibited foreign entities. Compliance with these expanded restrictions may require us to restructure supply chains, replace or diversify suppliers, or incur additional capital expenditures and operating costs. If the AMPC is further reduced or subject to more restrictive eligibility conditions during its phase-down period, or if we are unable to satisfy applicable requirements on a cost-effective basis, our profitability and financial stability could be materially and adversely affected. There can be no assurance that we will continue to qualify for the AMPC or other governmental incentives, or that the level of benefits available to us will not be further reduced or otherwise adversely modified.
Moreover, government incentive programs, including grants, subsidies and tax credits, remain subject to significant political, regulatory and interpretive uncertainty. Future changes in U.S. trade, industrial or energy policies could further limit the availability of tax credits, impose additional compliance burdens or result in increased costs, reduced operational flexibility or lower overall demand for electric vehicles or battery products. If government incentives applicable to our products or manufacturing activities are further reduced, eliminated, become subject to more restrictive conditions or otherwise become less favorable, or if we are unable to satisfy applicable eligibility requirements on a timely or cost-effective basis, our business, financial condition and results of operations could be materially and adversely affected.
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Any such event may have a material adverse effect on the business, results of operations and financial condition of the Rechargeable Battery Materials Segment and us.
An actual or anticipated deterioration in market conditions may result in a decline in demand for our rechargeable battery materials that may have a negative impact on the prices at which they can be sold. In such a case, we will likely face pressure to reduce prices and may need to rationalize our production capacity and reduce fixed costs. In addition, there can be no assurance that the IRA or other similar government measures will not be terminated or further amended to reduce the incentives provided to our key customers. A decrease, expiration or termination of such incentives could, if significant, have a material adverse effect on the key customers of our rechargeable battery materials business, which in turn may decrease demand for our products. The occurrence of any such events may have a material adverse impact on the business, results of operations and financial condition of the Rechargeable Battery Materials Segment.
We participate in overseas natural resources exploration, development and production projects, which expose us to various risks.
As part of our efforts to diversify our operations, we carefully seek out promising overseas natural resources exploration, development and production opportunities. We also participate in natural resources projects as part of consortia or through acquisitions of minority interests. We may also selectively acquire or invest in companies or businesses that engage in such activities. To the extent that we enter into these arrangements, our success in these endeavors will depend in part on the willingness of our partner companies to dedicate sufficient resources to their partnership with us, as well as our ability to finance such investments.
The demand and market acceptance for such activities abroad are subject to a substantially higher level of uncertainty than our traditional steel business and are substantially dependent upon the market condition of the global natural resources industry as well as the political and social environment of the target countries. The performance of projects in which we participate may be adversely affected by the occurrence of military hostility, political unrest, acts of terrorism, natural disaster or fire. For example, in connection with our 22.1% investment in NCR LLC in the United States, we recognized an impairment loss of Won 220 billion in 2024 related to a mine fire. In addition, some of our current exploration, development and production projects involve drilling exploratory wells on properties with no proven amount of natural resource reserves. Although all drilling, whether developmental or exploratory, involves risks, exploratory drilling involves greater risks of dry holes or failure to find commercial quantities of natural resources. Other risks to which such activities are subject include obtaining required regulatory approvals and licenses, securing and maintaining adequate property rights to land and natural resources, and managing local opposition to project development. A decrease in the market price of raw materials may also adversely impact the value of our investments related to natural resources projects, potentially resulting in impairment losses. We have limited experience in this industry, and we cannot assure you that our overseas natural resources exploration, development and production projects will be profitable, that we will be able to meet the financing requirements for such projects, or that we can recoup the costs related to such investments, which in turn could materially and adversely affect our business, financial condition and results of operations.
We may encounter problems with joint overseas natural resources exploration, development and production projects and large-scale infrastructure projects, which may materially and adversely affect our business.
We typically pursue our natural resources exploration, development and production projects jointly with consortium partners or through acquisition of minority interests in such projects, and we expect to be involved in other joint projects in the future. We sometimes hold a majority interest in the projects among the consortium partners, but we often lack a controlling interest in the joint projects. Therefore, we may not be able to require that our joint ventures sell assets or return invested capital,
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make additional capital contributions or take any other action without the vote of at least a majority of our consortium partners. If there are disagreements between our consortium partners and us regarding the business and operations of the joint projects, we cannot assure you that we will be able to resolve them in a manner that will be in our best interests. Certain major decisions, such as selling a stake in the joint project, may require the consent of all other partners. These limitations may adversely affect our ability to obtain the economic and other benefits we seek from participating in these projects.
In addition, our consortium partners may:
have economic or business interests or goals that are inconsistent with ours;
take actions contrary to our instructions, requests, policies or objectives;
be unable or unwilling to fulfill their obligations;
have financial difficulties; or
have disputes with us as to their rights, responsibilities and obligations.
Any of these and other factors may have a material adverse effect on the performance of our joint projects and expose us to a number of risks, including the risk that the partners may be incapable of providing the required financial support to the partnerships and the risk that the partners may not be able to fulfill their other obligations, resulting in disputes not only between our partners and us, but also between the joint ventures and their customers. Such a material adverse effect on the performance of our joint projects may in turn materially and adversely affect our business, results of operations and financial condition.
Earthquakes, tsunamis, floods, severe health epidemics (including the occurrence of widespread infectious diseases such as the global COVID-19 pandemic) and other natural calamities could materially and adversely affect our business, results of operations or financial condition.
If earthquakes, tsunamis, floods, severe health epidemics or any other natural calamities were to occur in the future in any area where any of our assets, suppliers or customers are located, our business, results of operations or financial condition could be adversely affected. For example, Typhoon Hinnamnor, a powerful tropical cyclone that landed in South Gyeongsang Province, Korea in September 2022, caused substantial flooding and property damage in cities located near the coastline, including Pohang. The typhoon caused electricity blackouts and flooded some of the Pohang Works’ facilities located adjacent to Youngil Bay on the southeastern coast of Korea, causing disruptions to our downstream production activities, which adversely impacted our sales in the fourth quarter of 2022 following the flood.
A number of suppliers of our raw materials and customers of our products are also located in countries that have historically suffered natural calamities from time to time, such as Australia, China and Japan, as well as Korea. Any occurrence of such natural calamities in countries where our suppliers are located may lead to shortages or delays in the supply of raw materials. In addition, natural calamities in areas where our customers are located, including China, Southeast Asia, Japan, Europe, North America and Korea, may cause disruptions in their businesses, which in turn could adversely impact their demand for our products.
In addition, if severe health epidemics were to occur in the future in any area where any of our assets, suppliers or customers are located, our business, results of operations or financial condition could be adversely affected. For example, COVID-19, an infectious disease caused by severe acute respiratory syndrome coronavirus 2, was declared a “pandemic” by the World Health Organization in March 2020. The global outbreak of COVID-19 had led to global economic and financial disruptions and had adversely affected our business operations.
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Risks associated with COVID-19 or other types of widespread infectious diseases include:
an increase in unemployment among, and/or decrease in disposable income of, consumers who purchase the products manufactured by our customers and a decline in overall consumer confidence and spending levels, which in turn may decrease demand for our products;
disruption in the normal operations of the businesses of our customers, which in turn may decrease demand for our products;
disruption in the supply of raw materials from our suppliers and vendors;
disruption in the delivery of our products to our customers;
disruption in the normal operations of our business resulting from contraction of infectious diseases by our employees or quarantine measures imposed by governments, which may necessitate our employees to be quarantined and/or our manufacturing facilities or offices to be temporarily shut down;
disruption resulting from the necessity for social distancing, including implementation of temporary adjustment of work arrangements requiring employees to work remotely, which may lead to a reduction in labor productivity (for example, from time to time, we implemented staggered remote working arrangements for our employees at our headquarters);
depreciation of the Won against major foreign currencies, which in turn may increase the cost of imported raw materials;
unstable global and Korean financial markets, which may adversely affect our ability to meet our funding needs on a timely and cost-effective basis; and
impairments in the fair value of our investments in companies that may be adversely affected by the pandemic.
In the event that a future recurrence of COVID-19 or an occurrence of other types of widespread infectious diseases cannot be effectively and timely contained, our business, financial condition and results of operations may be materially and adversely affected.
The Korean electric power industry is heavily regulated by the Government, whose policies may have a material adverse impact on POSCO INTERNATIONAL’s power generation business.
The Korean electric power industry is heavily regulated by the Government, which seeks to ensure balanced overall electricity supply and demand in Korea at affordable rates to end users while taking into consideration various other factors, including economic conditions, national standard of living, long-term energy supply and demand plans and seasonality. To achieve such objectives, the Government has, from time to time, adopted various policy initiatives to foster efficiency in the Korean electric power industry, and has also adopted policy measures that affect electricity tariff rates in order to ease the burden on certain consumers. In addition, these policy initiatives have not always been fully implemented as originally planned and in some cases have been amended or replaced by new initiatives, among others, due to economic or policy considerations or a change in administration. No assurance can be provided that such policies, as well as changes therein, will not have a material adverse effect on POSCO INTERNATIONAL’s power generation business, results of operations or financial condition.
Cyclical fluctuations based on macroeconomic factors may adversely affect POSCO E&C’s business and performance.
We engage in engineering and construction activities through POSCO E&C. The Construction Segment of our Infrastructure Business is highly cyclical and tends to fluctuate based on
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macroeconomic factors, such as consumer confidence and income, employment levels, interest rates, inflation rates, demographic trends and policies of the Government. From time to time, the construction industry has experienced significant and sometimes prolonged downturns, and our construction revenues have fluctuated in the past depending on the level of public and private sector construction activities in Korea and abroad. In addition, the performance of POSCO E&C’s domestic residential property business is highly dependent on the general condition of the real estate market in Korea. The overall prospects for Korean construction companies remain uncertain, and a prolonged general downturn in the construction market resulting in weaker demand may adversely affect our business, results of operations or financial condition.
Many of POSCO E&C’s domestic and overseas construction projects are on a fixed-price basis, which could result in losses for us in the event that unforeseen additional expenses arise with respect to the project.
Many of POSCO E&C’s domestic and overseas construction projects are carried out on a fixed-price basis according to a predetermined timetable, pursuant to the terms of a fixed-price contract. Under such fixed-price contracts, POSCO E&C retains all cost savings on completed contracts but is also liable for the full amount of all cost overruns and may be required to pay damages for late delivery. The pricing of fixed-price contracts is crucial to POSCO E&C’s profitability, as is its ability to quantify risks to be borne by it and to provide for contingencies in the contract accordingly.
POSCO E&C attempts to anticipate costs of labor, raw materials, parts and components in its bids on fixed-price contracts. However, the costs incurred and gross profits realized on a fixed-price contract may vary from its estimates due to factors such as:
unanticipated variations in labor and equipment productivity over the term of a contract;
unanticipated increases in labor, raw material, parts and components, subcontracting and overhead costs, including as a result of bad weather;
delivery delays and corrective measures for poor workmanship; and
errors in estimates and bidding.
For example, in April 2025, due to a collapse at the Sinansan Line project site of POSCO E&C, POSCO E&C incurred losses and may incur additional costs, including those related to construction delays, compensation claims, regulatory penalties and enhanced safety compliance measures. Furthermore, in response to such accident, POSCO E&C temporarily suspended construction at all of its domestic sites for approximately one month to conduct company-wide safety inspections, resulting in decreased revenue, subcontractor standby costs and increased indirect costs.
If unforeseen additional expenses arise over the course of a construction project, such expenses are usually borne by POSCO E&C, and its profit from the project will be correspondingly reduced or eliminated. If POSCO E&C experiences significant unforeseen additional expenses with respect to its fixed price projects, it may incur losses on such projects, which could have a material adverse effect on its financial condition and results of operations.
We may not succeed in implementing our strategy to take advantage of, or fail to realize the anticipated benefits of, our holding company structure and diversification strategy.
We became a holding company on March 2, 2022, and one of our principal strategies is to take advantage of our holding company structure to invest in promising businesses. In part to prepare for the eventual maturation of the Korean steel market, we have made investments in the past decade to secure new growth engines by diversifying into new businesses related to our steel operations that we believe will offer greater potential returns, as well as entering into new businesses not related to our
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steel operations such as the development and production of lithium, cathode and anode materials, energy solutions (particularly liquefied natural gas (“LNG”) trading) and specialty crop (particularly palm oil, the value chain of which may be expanded into biofuel). From time to time, we may selectively acquire or invest in companies to pursue such diversification strategy. The implementation of this strategy may require additional investments of capital, infrastructure, human resources and management attention. This strategy entails certain risks, including the possibility that we may face significant competition from other holding companies and operating companies in particular segments. If our strategy does not succeed, we may incur losses on our investments and our results of operations and financial condition may suffer.
In order to streamline our diversification efforts, we are currently exploring avenues to divest from non-core underperforming projects and assets. As of December 31, 2025, we have divested from 73 non-core underperforming projects and assets. Although we will continue to streamline such non-core underperforming projects and assets, any potential transaction is dependent upon a number of factors that may be beyond our control, including, among other factors, market conditions, industry trends, the interests of third-parties and the availability of financing to potential buyers on reasonable terms. Furthermore, there can be no assurance that we will be able to consummate any such transaction on acceptable terms or at all. Our failure to successfully divest from non-core underperforming projects and assets or to reinvest the proceeds of any such divestment, each on acceptable terms, may have a material adverse effect on our financial condition and results of operations.
Furthermore, our success under a holding company structure depends on our ability to realize the anticipated synergies, growth opportunities and cost savings from coordinating the businesses of our various subsidiaries. Although we may integrate certain aspects of our subsidiaries’ operations into our holding company structure, our subsidiaries will generally continue to operate as independent entities with separate management and staff, and our ability to direct our subsidiaries’ day-to-day operations may be limited.
We may continue to increase our equity interest in our subsidiaries or investees and may also consider acquiring or merging with other companies to achieve more balanced growth and further diversify our revenue base. The integration of our new subsidiaries’ or investees’ separate businesses and operations, as well as those of any companies we may acquire or merge with in the future, under our holding company structure could require a significant amount of time, financial resources and management attention. Moreover, that process could disrupt our operations, reduce employee morale, produce unintended inconsistencies in our standards, controls, procedures or policies, and affect our relationships with customers and our ability to retain key personnel. The realization of the anticipated benefits of our holding company structure and any mergers or acquisitions we decide to pursue may be blocked, delayed or reduced as a result of many factors, some of which may be outside our control. These factors include:
unforeseen contingent risks, including lack of required capital resources or increased tax liabilities, relating to our holding company structure;
difficulties in integrating the diverse activities and operations of our subsidiaries or investees or any companies we may merge with or acquire;
unforeseen contingent risks or latent liabilities relating to the acquisition that may become apparent in the future;
difficulties in managing a larger business;
unexpected business disruptions;
loss of key management personnel or customers; and
labor unrest.
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Accordingly, we may not be able to realize the anticipated benefits of our holding company structure, and our business, results of operations and financial condition may suffer as a result.
We depend on limited forms of funding to fund our operations at the holding company level.
We are a holding company with no significant assets other than the shares of our subsidiaries. We expect our primary sources of funding and liquidity to be dividends from our subsidiaries, direct borrowings and issuances of equity or debt securities at the holding company level. Our ability to meet our obligations to our direct creditors and employees and our other liquidity needs and regulatory requirements at the holding company level depends on timely and adequate distributions from our subsidiaries and our ability to sell our securities or obtain credit from our lenders.
The ability of our subsidiaries to pay dividends to us depends on their financial condition and operating results. In the future, our subsidiaries may enter into agreements, such as credit agreements with lenders, that impose restrictions on their ability to make distributions to us, and the terms of future obligations and the operation of Korean law could prevent our subsidiaries from making sufficient distributions to us to allow us to make payments on our outstanding obligations. See “— As a holding company, we depend on receiving dividends from our subsidiaries to pay dividends on our common shares.” Any delay in receipt of or shortfall in payments to us from our subsidiaries could result in our inability to meet our liquidity needs, and may disrupt our operations at the holding company level.
In addition, creditors of our subsidiaries will generally have claims that are prior to any claims of our creditors with respect to their assets. Furthermore, our inability to sell our securities or obtain funds from our lenders on favorable terms, or at all, could also result in our inability to meet our liquidity needs and may disrupt our operations at the holding company level.
As a holding company, we depend on receiving dividends from our subsidiaries to pay dividends on our common shares.
Since our principal assets at the holding company level are the shares of our subsidiaries, our ability to pay dividends on our common shares largely depends on dividend payments from those subsidiaries. Those dividend payments are subject to the Korean Commercial Code and regulatory limitations, generally based on capital levels and retained earnings. For example, under the Korean Commercial Code, dividends may only be paid out of distributable income, an amount which is calculated by subtracting the aggregate amount of a company’s paid-in capital and certain mandatory legal reserves as well as certain unrealized profits from its net assets, in each case as of the end of the prior fiscal period.
Our subsidiaries may not continue to meet the applicable legal and regulatory requirements for the payment of dividends in the future. If they fail to do so, they may stop paying or reduce the amount of the dividends they pay to us, which would have an adverse effect on our ability to pay dividends on our common shares.
POSCO HOLDINGS INC. and POSCO remain jointly and severally liable for each other’s liabilities existing prior to the spin-off.
On March 1, 2022, we spun off our domestic steel production and sales business (through a vertical spin-off in accordance with Articles 530-2 through 530-12 of the Korean Commercial Code) to establish a wholly-owned subsidiary, and we converted into a holding company within the meaning of the Monopoly Regulation and Fair Trade Act (the “Spin-off”). The registration of the Spin-off occurred on March 2, 2022. As part of the Spin-off, we amended our name from POSCO to POSCO HOLDINGS INC., and the newly created wholly-owned subsidiary was named POSCO.
Under the relevant provisions of the Commercial Act of Korea relating to spin-offs, both the operating company and the holding company remain jointly and severally liable after the corporate
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spin-off for all of their liabilities existing prior to the corporate spin-off unless such joint and several liability has been successfully eliminated through a special resolution adopted at a general meeting of shareholders of the splitting company and consents of creditors of the affected debt, including consent by resolutions at bondholders’ meetings, which resolutions are approved by the court. POSCO HOLDINGS INC. and POSCO remain jointly and severally liable for each other’s debts and other liabilities that existed prior to March 1, 2022 that currently remain outstanding. POSCO is the successor-in-title to all the assets and liabilities and rights and obligations that were related to the domestic steel production and sales business transferred in the Spin-off, as well as all authorized licenses, employment relations, contracts and lawsuits that were directly related to such business, and POSCO HOLDINGS INC. remains jointly and severally liable for such liabilities. The remaining assets and liabilities and rights and obligations related to other business areas remain with POSCO HOLDINGS INC., and POSCO is jointly and severally liable for such liabilities. Defaults by POSCO of such liabilities, if significant, could have a material adverse effect on our results of operations and financial condition.
We are subject to environmental regulations, and our operations could expose us to substantial liabilities.
We are subject to national and local environmental laws and regulations, including increasing pressure to reduce emission of carbon dioxide relating to our manufacturing process, and our steel manufacturing and construction operations could expose us to risk of substantial liability relating to environmental or health and safety issues, such as those resulting from discharge of pollutants and carbon dioxide into the environment, the handling, storage and disposal of solid or hazardous materials or wastes and the investigation and remediation of contaminated sites. We may be responsible for the investigation and remediation of environmental conditions at currently and formerly operated manufacturing or construction sites. We may also be subject to associated liabilities, including liabilities for natural resource damage, third party property damage or personal injury resulting from lawsuits brought by the Government or private litigants. In the course of our operations, hazardous wastes may be generated at third party-owned or operated sites, and hazardous wastes may be disposed of or treated at third party-owned or operated disposal sites. If those sites become contaminated, we could also be held responsible for the cost of investigation and remediation of such sites, for any associated natural resource damage, and for civil or criminal fines or penalties.
Furthermore, heightened global awareness and international and national commitments to reduce greenhouse gas emissions and counteract climate change (including increased activism by non-governmental and political organizations campaigning against fossil fuel extractions) may lead to increased costs for us. Investor preferences and sentiments are also influenced by environmental, social and corporate governance considerations including climate change and the transition to a lower carbon economy. Changes in such preferences and sentiment, including increased scrutiny from market participants, environmental organizations or the press, as well as compliance with such new and more stringent environmental obligations relating to greenhouse gas emissions may require additional capital expenditures or modifications in operating practices, as well as additional reporting obligations. In addition, we may also be subject to pressure and legal actions from environmental activists. For example, in February 2025, a group of ten individuals filed a lawsuit at the Daegu District Court against POSCO seeking an injunction to stop the refurbishment of the No. 2 blast furnace at Gwangyang Works alleging that such refurbishment violates their right to a healthy environment. POSCO intends to vigorously defend against such lawsuit.
We are subject to safety regulations, and our operations could expose us to substantial liabilities.
The Serious Accident Punishment Act (the “SAPA”) imposes criminal liability on individuals and entities responsible for “serious accidents.” Under SAPA, the term “serious accident” encompasses not
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only accidents at industrial sites, such as factories or construction sites, but also “public” disasters caused by defects in the design, manufacture, installation and management of products, product ingredients or public facilities or transportation. The SAPA imposes criminal liability against (i) business owners or executives (as defined by the law) who fail to ensure the safety of their business operations and (ii) businesses or institutions that fail their supervisory duties. In case of willful misconduct or gross negligence, the SAPA also imposes punitive damages of up to five times the actual damages. Our operational activities involve inherent risks that may result in accidents involving serious injury or loss of life, environmental damage or property damage. Even though we plan to prioritize on-site safety management by engaging in communications with different stakeholders and investing more in safe environments, there is no guarantee that there will not be accidents due to our inherent operating risks. Although we have analyzed the potential impacts of the SAPA on us and aligned our policies, internal regulations and manuals in preparation for the implementation of the SAPA, there is no guarantee that the SAPA would not adversely affect our business, financial condition and results of operations. For example, in April 2025, there was a collapse at the Sinansan Line project site of POSCO E&C and in November 2025, there were two incidents involving toxic chemicals at Pohang Steelworks, the first incident resulting in one fatality and three injured during repair work and the second incident resulting in two fatalities and four injured during sludge cleaning operations. These incidents are currently being investigated by the relevant authorities and we are fully cooperating with such investigations. While the outcome of such investigations remains uncertain, there can be no assurance that penalties or other disciplinary actions may not be imposed. There can be no assurance that any such penalties or disciplinary actions may not have a material adverse effect on our results of operations and financial condition.
Under the SAPA, businesses may avoid punishment if it is found that they duly performed their duties to ensure the safety and health of the participants in their business operations. However, we cannot assure you that, despite all precautionary and preventative measures undertaken by us, these measures will prove to be fully effective at all times or that an incident that could cause harm to our reputation and operation will not happen in the future, including due to factors beyond our control.
Significant breaches of information security could lead to legal and financial exposure, damage to our reputation and a loss of confidence by our customers.
Our business relies heavily on mission-critical, complex and interdependent information technology systems that support our business processes. It involves the storage and transmission of confidential information relating to us as well as our customers and suppliers. Any significant breach in our information security could expose us to a risk of loss, improper use or disclosure of such information, and could give rise to significant liability or litigation, any of which could harm our reputation and adversely affect our business.
We believe that there has been no instance of a material breach in our information security to date that resulted in significant disruption of our operations and had a significant adverse effect on our operational results, or on third parties, including our customers and suppliers. However, there can be no assurance that we will be able to continue to prevent security incidents or other breaches in our information security from having a material adverse effect on our business, results of operations, financial viability or reputation. In addition, our information security measures may fail due to external and internal security threats, outages, malicious intrusions and attacks, programming or human errors and malfeasance, or other similar events.
Instituting appropriate access controls and safeguards across our information technology infrastructure is challenging. For a discussion of our cybersecurity risk management and strategy, see “Item 16.K. Cybersecurity.” Furthermore, outside parties may attempt to fraudulently induce employees to divulge sensitive information to gain access to our data or our customers’ data or access credentials. Because the techniques used to obtain unauthorized access, disable or degrade services or sabotage systems change frequently and often are not recognized until attacks are launched against a target, we
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may be unable to anticipate these techniques or implement adequate preventative measures. If an actual or perceived breach of our cybersecurity occurs or the market perception of the effectiveness of our information security measures is compromised, this may lead to significant legal and financial exposure, including legal claims and regulatory fines and penalties, reputational harm and a loss of confidence of our customers, which could have an adverse effect on our business, financial condition and results of operations.
Failure to protect our intellectual property rights could impair our competitiveness and harm our business and future prospects.
We believe that developing new steel manufacturing technologies that can be differentiated from those of our competitors, such as FINEX, automotive steel manufacturing technology and high-manganese steel manufacturing technology, is critical to the success of our business. We take active measures to obtain protection of our intellectual property by obtaining patents and undertaking monitoring activities in our major markets. However, we cannot assure you that the measures we take will effectively deter competitors from improper use of our proprietary technologies. Our competitors may misappropriate our intellectual property, disputes as to ownership of intellectual property may arise and our intellectual property may otherwise become known or independently developed by our competitors. Any failure to protect our intellectual property could impair our competitiveness and harm our business and future prospects.
We rely on trade secrets and other unpatented proprietary know-how to maintain our competitive position, and unauthorized disclosure of our trade secrets or other unpatented proprietary know-how could negatively affect our business.
We rely on trade secrets and unpatented proprietary know-how and information. We enter into confidentiality agreements with each of our employees and consultants upon the commencement of an employment or consulting relationship. These agreements generally provide that all inventions, ideas, discoveries, improvements and patentable material made or conceived by the individual arising out of the employment or consulting relationship and all confidential information developed or made known to the individual during the term of the relationship are our exclusive property. We cannot assure the enforceability of these types of agreements, or that they will not be breached. We also cannot be certain that we will have adequate remedies for any breach. The disclosure of our trade secrets or other know-how as a result of such a breach could adversely affect our business.
We face the risk of litigation proceedings relating to infringement of intellectual property rights of third parties, which, if determined adversely to us, could cause us to lose significant rights, pay significant damage awards or suspend the sale of certain products.
Our success depends largely on our ability to develop and use our technology and know-how in a proprietary manner without infringing the intellectual property rights of third parties. The validity and scope of claims relating to technology and patents involve complex scientific, legal and factual questions and analysis and, therefore, may be highly uncertain. In addition, because patent applications in many jurisdictions are kept confidential for an extended period before they are published, we may be unaware of other persons’ pending patent applications that relate to our products or manufacturing processes. Accordingly, we face the risk of litigation proceedings relating to infringement of intellectual property rights of third parties.
The plaintiffs in actions relating to infringement of intellectual property rights typically seek injunctions and substantial damages. Although patent and other intellectual property disputes are often settled through licensing or similar arrangements, there can be no assurance that such licenses can be obtained on acceptable terms or at all. Accordingly, regardless of the scope or validity of disputed patents or the merits of any patent infringement claims by potential or actual litigants, we may have to
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engage in protracted litigation. The defense and prosecution of intellectual property suits, patent opposition proceedings and related legal and administrative proceedings can be both costly and time-consuming and may significantly divert the efforts and resources of our technical and management personnel. An adverse determination in any such litigation or proceedings could subject us to pay substantial damages to third parties, require us to seek licenses from third parties and pay ongoing royalties or redesign certain products, or subject us to injunctions prohibiting the manufacture and sale of our products or the use of technologies in certain jurisdictions. The occurrence of any of the foregoing could have a material adverse effect on our reputation, business, financial condition and results of operations.
Labor laws and a recent Supreme Court decision on contract-based workers dispatched by third-party contractors could restrict flexibility in our labor management and result in an increase in our labor-related costs.
In July 2022, the Supreme Court of Korea held that 59 workers employed by our third-party contractors and dispatched to our production facilities who brought a claim under the Dispatched Worker Protection Act (“DWPA”) of Korea were in a direct employment relationship with us. The DWPA limits the maximum period that a worker may be dispatched to a company to two years. Under the DWPA, worker dispatch exceeding such period may result in a company’s obligation to directly hire such dispatched workers in certain situations, including where such workers were directly supervised by the company rather than the third-party contractor. Pursuant to such judgment, we hired 55 of such workers that met our working age criteria as our full-time direct employees. In October 2022, all 59 original plaintiffs collectively filed a complaint at the Gwangju District Court claiming an aggregate amount of Won 3.0 billion as unpaid wages for the three-year period that they should have been recognized as our full-time direct employees. Furthermore, in July 2025, the 55 employees directly hired by us collectively filed a claim at the Gwangju District Court, alleging wage discrimination compared to certain other full-time direct employees. Both such lawsuits are still in progress, and we intend to vigorously defend against such lawsuits.
In addition to the decision rendered by the Supreme Court in July 2022, in April 2026, the Supreme Court issued rulings in employment status lawsuits brought by 331 workers who had been dispatched to our production facilities, ruling partially against us. The Supreme Court determined that 303 of these workers were in a direct employment relationship with us, and we have hired them as full-time direct employees in accordance with the rulings. Of the remaining eight workers, one claim was dismissed due to the plaintiff exceeding the mandatory retirement age, and the cases involving the remaining seven workers have been remanded to the Gwangju High Court, where they remain pending. The plaintiffs have also jointly filed lawsuits in the Gwangju and Daegu district courts seeking unpaid wages for periods during which they claim they should have been recognized as our full-time direct employees, and these cases remain pending.
As of April 21, 2026, 25 lawsuits involving approximately 4,337 workers employed by our third-party contractors who worked at our production facilities remain pending, all relating to the confirmation of employment status with us. Many of these cases also include claims for unpaid wages. In two of these cases, involving 241 and 138 workers, respectively, the district courts ruled against us, and the appellate court ruled against us in one case and partially in our favor in the other. We appealed both decisions to the Supreme Court in March 2026, and they remain pending. The plaintiffs in these cases have also filed separate lawsuits in February 2024 at the Suncheon Branch of the Gwangju District Court seeking unpaid wages, which remain pending. The remaining 23 lawsuits are pending at the district court level. We intend to vigorously defend against these claims.
We cannot provide any assurance that there will not be additional lawsuits related to the employment status of workers employed by our third-party contractors who worked at our production facilities, and we have not made any provisions related to any of the pending proceedings. The application of the applicable labor law will be based on the specific facts of the cases, and the general
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applicability of the July 2022 Supreme Court ruling cannot be determined with certainty at this time. However, if similar judgments were to be rendered against us, they could restrict our ability to manage our labor force flexibly and significantly increase our labor-related costs, which in turn may have a material adverse effect on our results of operations.
We may be exposed to potential claims for unpaid wages and become subject to additional labor costs arising from the Supreme Court of Korea’s interpretation of ordinary wages.
Under the Labor Standards Act, an employee’s “ordinary wage” is used as the basis for calculating various statutory benefits. In December 2013, the Supreme Court of Korea ruled that regularly paid bonuses, including those that are paid other than on a monthly basis, are included in the scope of employees’ ordinary wages if these bonuses are paid (i) “regularly,” (ii) “uniformly” and (iii) on a “fixed basis,” notwithstanding differential amounts based on seniority. However, in December 2024, the Supreme Court of Korea reversed its prior ruling and excluded “fixed basis” from the attributes of ordinary wage and redefined the concept and judgment criteria of what constitutes ordinary wage. According to the Supreme Court of Korea’s decision in December 2024, a wage determined to be paid regularly and uniformly in exchange for prescribed work constitutes ordinary wage regardless of the existence or fulfillment of conditions attached to it. According to such decision, wages based on tenure or on the number of working days, where payment is made only when an employee satisfies a required number of working days within the prescribed working period, are recognized as ordinary wages. However, wages conditioned on working days that exceed the prescribed working period are not regarded as ordinary wages, as they are not paid solely for performing the prescribed work but rather constitute compensation for additional work beyond the prescribed working hours. In order to minimize confusion resulting from this change, the Supreme Court of Korea also ruled that the revised legal principle will apply to ordinary wage calculations starting from the date of the ruling, which is December 19, 2024.
Under this decision, any provision of a collective bargaining agreement or other agreements that attempt to exclude such regular bonuses from employees’ ordinary wages will be deemed void for violation of the mandatory provisions of Korean law.
The Ministry of Employment and Labor subsequently revised the ‘Guidelines for Labor-Management Guidance on Ordinary Wage’ in February 2025 (the “Guidelines”). The new legal principle on ordinary wages is effective for ordinary wage calculations starting from December 19, 2024. While we are currently assessing the impact of the Supreme Court of Korea’s decision and the Guidelines on our regular bonuses paid in the past, if we are nonetheless determined to have underpaid employees by under-calculating their ordinary wages over the past three years or in the future, we may be liable for additional payments reflecting the expanded scope of employees’ ordinary wages. Any such additional payments may have an adverse effect on our financial condition and results of operations.
Escalations in tensions with North Korea could have an adverse effect on us and the market value of our common shares and ADSs.
Relations between Korea and North Korea have been tense throughout Korea’s modern history. The level of tension between Korea and North Korea has fluctuated and may increase abruptly as a result of current and future events. In particular, there have been heightened security concerns in recent years stemming from North Korea’s nuclear weapon, ballistic missile and satellite programs as well as its hostile military actions against Korea.
North Korea renounced its obligations under the Nuclear Non-Proliferation Treaty in January 2003 and has conducted six rounds of nuclear tests since October 2006, including claimed detonations of hydrogen bombs, and warheads that can be mounted on ballistic missiles. Over the years, North Korea has continued to conduct a series of ballistic missile tests, including missiles launched from
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submarines and intercontinental ballistic missiles that it claims can reach the United States mainland. North Korea has increased the frequency of such activities since the beginning of 2022, firing numerous ballistic missiles, including intercontinental ballistic missiles, and in November 2023, successfully launched its first spy satellite. In response, the Government has repeatedly condemned North Korea’s provocations and flagrant violations of relevant United Nations Security Council resolutions. Over the years, the United Nations Security Council has passed a series of resolutions condemning North Korea’s actions and significantly expanding the scope of sanctions applicable to North Korea, as did the United States and the European Union.
North Korea’s economy also faces severe challenges, which may further aggravate social and political pressures within North Korea. Although bilateral summit meetings between Korea and North Korea were held in April, May and September 2018 and between North Korea and the United States in June 2018, February 2019 and June 2019, there can be no assurance that the level of tensions affecting the Korean peninsula will not escalate in the future. Any increase in tensions, which may occur, for example, if North Korea experiences a leadership crisis, high-level contacts between Korea and North Korea or between the United States and North Korea break down or military hostilities occur, could have a material adverse effect on the Korean economy and on our business, financial condition and results of operations and the market value of our common shares and ADSs.
If you surrender your ADRs to withdraw shares of our common stock, you may not be allowed to deposit the shares again to obtain ADRs.
Under the deposit agreement, holders of shares of our common stock may deposit those shares with the ADR depositary’s custodian in Korea and obtain ADRs, and holders of ADRs may surrender ADRs to the ADR depositary and receive shares of our common stock. However, under current Korean laws and regulations, the depositary bank is required to obtain our prior consent for the number of shares to be deposited in any given proposed deposit that exceeds the difference between (i) the aggregate number of shares deposited by us for the issuance of ADSs (including deposits in connection with the initial and all subsequent offerings of ADSs and stock dividends or other distributions related to these ADSs) and (ii) the number of shares on deposit with the depositary bank at the time of such proposed deposit. It is possible that we may not give the consent. As a result, if you surrender ADRs and withdraw shares of common stock, you may not be able to deposit the shares again to obtain ADRs. See “Item 10. Additional Information — Item 10.D. Exchange Controls.”
You may not be able to exercise preemptive rights for additional shares of common stock and may suffer dilution of your equity interest in us.
The Commercial Code and our articles of incorporation require us, with some exceptions, to offer shareholders the right to subscribe for new shares in proportion to their existing ownership percentage whenever new shares are issued. If we issue new shares to persons other than our shareholders (See “Item 10.B. Memorandum and Articles of Association — Preemptive Rights and Issuance of Additional Shares”), a holder of our ADSs will experience dilution of such holding. If none of these exceptions is available, we will be required to grant preemptive rights when issuing additional common shares under Korean law. Under the deposit agreement governing the ADSs, if we offer any rights to subscribe for additional shares of our common stock or any rights of any other nature, the ADR depositary, after consultation with us, may make the rights available to you or use reasonable efforts to dispose of the rights on your behalf and make the net proceeds available to you. The ADR depositary, however, is not required to make available to you any rights to purchase any additional shares unless it deems that doing so is lawful and feasible and:
a registration statement filed by us under the Securities Act is in effect with respect to those shares; or
the offering and sale of those shares is exempt from or is not subject to the registration requirements of the Securities Act.
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We are under no obligation to file any registration statement under the Securities Act to enable you to exercise preemptive rights in respect of the common shares underlying the ADSs, and we cannot assure you that any registration statement would be filed or that an exemption from the registration requirement under the Securities Act would be available. Accordingly, if a registration statement is required for you to exercise preemptive rights but is not filed by us, you will not be able to exercise your preemptive rights for additional shares and may suffer dilution of your equity interest in us.
U.S. investors may have difficulty enforcing civil liabilities against us and our directors and senior management.
We are incorporated in Korea with our principal executive offices located in Seoul. The majority of our directors and senior management are residents of jurisdictions outside the United States, and the majority of our assets and the assets of such persons are located outside the United States. As a result, U.S. investors may find it difficult to effect service of process within the United States upon us or such persons or to enforce outside the United States judgments obtained against us or such persons in U.S. courts, including actions predicated upon the civil liability provisions of the U.S. federal securities laws. It may also be difficult for an investor to enforce in U.S. courts judgments obtained against us or such persons in courts in jurisdictions outside the United States, including actions predicated upon the civil liability provisions of the U.S. federal securities laws. It may also be difficult for a U.S. investor to bring an action in a Korean court predicated upon the civil liability provisions of the U.S. federal securities laws against our directors and senior management and non-U.S. experts named in this Annual Report on Form 20-F.
We engage in activities relating to countries targeted by United States, European Union and United Kingdom economic sanctions.
The U.S. Department of the Treasury’s Office of Foreign Assets Control, or “OFAC,” enforces certain laws and regulations (“U.S. Sanctions”) that impose prohibitions or restrictions on U.S. persons and, in some instances, foreign entities owned or controlled by U.S. persons, with respect to activities or transactions with or involving certain countries, governments, entities and individuals that are the subject of U.S. Sanctions, including countries and territories subject to a comprehensive embargo (currently Cuba, Iran, North Korea, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, and the Crimea regions of Ukraine), as well as parties that are subject to, or are majority owned by one or more parties subject to, so-called blocking sanctions. U.S. persons are also generally prohibited from facilitating such activities or transactions. Similarly, the European Union enforces certain laws and regulations (“E.U. Sanctions”) that impose restrictions on nationals of E.U. member states, persons located within E.U. member states, entities incorporated or constituted under the law of an E.U. member state, or business conducted in whole or in part in E.U. member states with respect to activities or transactions with certain countries, governments, entities and individuals that are the subject of E.U. Sanctions. E.U. persons are also generally prohibited from activities that promote such activities or transactions. The United Kingdom also enforces certain laws and regulations (“UK Sanctions”) that impose restrictions upon UK persons with respect to activities or transactions with parties that are the subject of UK Sanctions. In light of recent international developments, particularly the ongoing war in Ukraine, the United States, European Union, United Kingdom and other jurisdictions have imposed enhanced sanctions targeting Russia.
We and our subsidiaries engage in limited business activities in Russia. In particular, we purchase raw materials from non-Russian third parties that are sourced from mines in Russia. We believe that such activities do not involve any U.S. goods or services and otherwise do not implicate or violate U.S. Sanctions, E.U. Sanctions or UK Sanctions. To our knowledge, none of our business in Russia involves parties subject to U.S. Sanctions. Our activities in Russia accounted for 0.03% of our consolidated revenue in 2023. We did not recognize any revenue from business operations in Russia
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in 2024 and 2025. In addition, we did not recognize any revenue from business operations in Iran in 2023, 2024 and 2025, and we currently do not have any plans to engage in business operations in Iran in the foreseeable future, other than collecting outstanding receivables.
POSCO Steeleon Co., Ltd. (“POSCO Steeleon”), a subsidiary of POSCO, holds a 70% interest in Myanmar POSCO C&C Co., Ltd. (“Myanmar POSCO C&C”), a joint venture with Myanmar Economic Holdings Public Company Limited (“MEHL”). MEHL was designated for U.S. Sanctions on March 25, 2021. Myanmar POSCO C&C engages in the production and sale of coated steel roofing sheets in Myanmar, and its sales accounted for 0.03% of our consolidated revenue in 2023, 0.05% in 2024 and 0.05% in 2025. POSCO Steeleon is monitoring changes in Myanmar’s business environment and assessing its shareholding arrangement. U.S. Sanctions that apply to MEHL do not apply to us, POSCO, POSCO Steeleon or Myanmar POSCO C&C.
POSCO INTERNATIONAL holds a 51.0% interest in a gas field project in Myanmar. Myanmar Oil and Gas Enterprise (“MOGE”) holds a 15.0% interest in the project and the remaining interests are held by non-sanctioned persons. On February 21, 2022, MOGE was designated for E.U. Sanctions, and certain managers of MOGE have been subsequently designated for U.S. Sanctions. Such sanctions do not extend to POSCO INTERNATIONAL, POSCO or, to our knowledge, the gas field project. On October 31, 2023, OFAC issued Burma-related Directive 1 under Executive Order 14014, which prohibits U.S. persons from providing, exporting or re-exporting, directly or indirectly, financial services to, or for the benefit of, MOGE, regardless of the currency in which any prohibited transaction is denominated.POSCO INTERNATIONAL is operating the Myanmar gas field project in compliance with such directive. Our revenue recognized from the gas field project accounted for 0.80% of our consolidated revenue in 2023, 0.83% in 2024 and 0.94% in 2025.
We expect to continue to engage in business activities and make investments in countries or territories on which comprehensive U.S. Sanctions have been imposed and also plan to continue to engage in business in Russia. Although we believe that U.S. Sanctions, E.U. Sanctions and UK Sanctions under their current terms are not applicable to our current activities, the relevant authorities may take a different view, our reputation may be adversely affected, and some of our investors may be required to divest their investments in us, including under the laws of certain U.S. states or under internal investment policies or may decide for reputational reasons to divest such investments. We are aware of initiatives by U.S. governmental entities and U.S. institutional investors, such as pension funds, to adopt or consider adopting laws, regulations or policies prohibiting transactions with or investment in, or requiring divestment from, entities doing business with countries identified as state sponsors of terrorism. There can be no assurance that the foregoing will not occur, that sanctions regimes around the world will not change in a way that impacts our business, or that such occurrences will not have a material adverse effect on the value of our securities.
U.S. investors could be subject to adverse U.S. federal income tax consequences if we are treated as a passive foreign investment company (“PFIC”) for any taxable year during which they hold our common stock of ADSs.
We will be classified as a PFIC for U.S. federal income tax purposes if, for any taxable year, either (i) 75 percent or more of our gross income for the taxable year is passive income or (ii) at least 50 percent of the value of our assets (generally determined on the basis of a quarterly average) is attributable to assets that produce or are held for the production of passive income. The determination of whether we are a PFIC must be made annually based on the facts and circumstances at the relevant time, some of which may be beyond our control, including the valuation of our assets as implied by the market price for our common stock or ADSs. Accordingly, we could be classified as a PFIC in the current or a future taxable year, and that possibility may be increased significantly by market volatility or a decline in the price of our common stock or ADSs.
If we were to be classified as a PFIC in any taxable year during which a U.S. holder (as defined in “Item 10.E. Taxation — United States Taxation”) holds our common stock or ADSs, such U.S. holder
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could be subject to a special tax at ordinary income rates on “excess distributions,” including certain distributions by us and gain that the U.S. holder recognizes on the sale of our common stock or ADSs. The amount of income tax on any excess distributions would be increased by an interest charge to compensate for tax deferral, calculated as if the excess distributions were earned ratably over the period the U.S. holder held the common stock or ADSs. See “Item 10.E. Taxation — United States Taxation — Shares of Common Stock and ADSs — Passive Foreign Investment Company Rules.”
This annual report contains “forward-looking statements” that are subject to various risks and uncertainties.
This annual report contains “forward-looking statements” that are based on our current expectations, assumptions, estimates and projections about our company and our industry. The forward-looking statements are subject to various risks and uncertainties. These forward-looking statements include, but are not limited to, those statements using words such as “anticipate,” “believe,” “continues,” “expect,” “estimate,” “intend,” “project,” “aim,” “plan,” “likely to,” “target,” “contemplate,” “predict,” “potential” and similar expressions and future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may,” or similar expressions generally intended to identify forward-looking statements. Those statements include, among other things, the discussions of our business strategy and expectations concerning our market position, future operations, margins, profitability, liquidity and capital resources. We caution you that reliance on any forward-looking statement involves risks and uncertainties, and that although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and, as a result, the forward-looking statements based on those assumptions could be incorrect. The uncertainties in this regard include, but are not limited to, those identified in the risk factors discussed above. In light of these and other uncertainties, you should not conclude that we will necessarily achieve any plans and objectives or projected financial results referred to in any of the forward-looking statements. We do not undertake to release the results of any revisions of these forward-looking statements to reflect future events or circumstances.
Item 4. Information on the Company
Item 4.A. History and Development of the Company
We were established by the Government on April 1, 1968, under the Commercial Code, to manufacture and distribute steel rolled products and plates in the domestic and overseas markets. The Government owned more than 70% of our equity until 1988, when the Government reduced its ownership of our common stock to 35% through a public offering and listing our shares on the KRX KOSPI Market. In December 1998, the Government sold all of our common stock it owned directly, and The Korea Development Bank completed the sale of our shares that it owned in September 2000. The Government no longer holds any direct interest in us, and our outstanding common stock is currently held by individuals and institutions. See “Item 7. Major Shareholders and Related Party Transactions — Item 7A. Major Shareholders.”
On March 1, 2022, we spun off our domestic steel production and sales business (through a vertical spin-off in accordance with Articles 530-2 through 530-12 of the Korean Commercial Code) to establish a wholly-owned subsidiary (POSCO), and we converted into a holding company (POSCO HOLDINGS INC.) within the meaning of the Monopoly Regulation and Fair Trade Act in order to more effectively promote the growth of the group’s businesses, enhance synergies among the group’s businesses and actively explore diversification opportunities in promising business areas. The registration of the Spin-off occurred on March 2, 2022. As part of the Spin-off, we amended our name from POSCO to POSCO HOLDINGS INC., and the newly created wholly-owned subsidiary was named POSCO.
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Our legal and commercial name is POSCO HOLDINGS INC. Our principal executive offices are located at POSCO Center, 440 Teheran-ro, Gangnam-gu, Seoul, Korea 06194, and our telephone number is +82-2-3457-0114. The address of our English website is http://www.posco-inc.com.
The SEC maintains a website (http://www.sec.gov), which contains reports, information statements and other information regarding issuers that file electronically with the SEC.
Item 4.B. Business Overview
The Company
We are a holding company, and we operate through our consolidated subsidiaries including POSCO, one of the largest steel producers in the world. We also engage in businesses that complement our steel manufacturing operations and also carefully seek out promising investment opportunities to diversify our businesses both vertically and horizontally. One of our principal strategies is to take advantage of our holding company structure to invest in promising businesses. We have made investments in the past decade to secure new growth engines by diversifying into new businesses related to our steel operations that we believe will offer greater potential returns, as well as entering into new businesses not related to our steel operations.
We have six reportable segments as follows:
Steel Segment. Our Steel Segment includes the production and sale of steel products.
Infrastructure Business. Our Infrastructure Business includes our businesses related to provision of infrastructure and related services. Such business is divided into three segments as follows:
Trading Segment. The Trading Segment of our Infrastructure Business consists primarily of the global trading activities, natural resources development activities and power generation activities of POSCO INTERNATIONAL. POSCO INTERNATIONAL exports and imports a wide range of steel products that are both obtained from and supplied to POSCO, as well as steel and other products from and to other suppliers and purchasers in Korea and overseas. On January 1, 2023, POSCO Energy, Korea’s largest domestic private power utility company and a provider of alternative low-carbon energy solutions, merged into POSCO INTERNATIONAL.
Construction Segment. The Construction Segment of our Infrastructure Business consists primarily of the planning, designing and construction of industrial plants, civil engineering projects and commercial and residential buildings, both in Korea and overseas, by POSCO E&C.
Logistics and Others Segment. The Logistics and Others Segment of our Infrastructure Business consists primarily of the information technology and operational technology services of POSCO DX and the integrated logistics services of POSCO FLOW.
Rechargeable Battery Materials Segment. Our Rechargeable Battery Materials Segment includes (i) the manufacturing and sale of various energy-related and other industrial materials by POSCO Future M, including cathode and anode materials for rechargeable batteries and (ii) investments made by us in production projects relating to other materials such as lithium.
Others Segment. Our Others Segment includes POSCO HOLDINGS INC. and all other entities which fall below the reporting thresholds. POSCO HOLDINGS INC. actively explores diversification opportunities in promising business areas.
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The table below sets out our revenue by segment category for the periods indicated.
Segments
Steel Segment
Infrastructure Business:
Trading Segment (1)
Construction Segment
Logistics and Others Segment (2)
Rechargeable Battery Materials Segment
Others Segment
Basis difference adjustments(3)
Total
Including POSCO INTERNATIONAL.
Including POSCO DX and POSCO FLOW.
Basis difference adjustments are related to the difference in recognizing revenue and expenses of the Construction Segment of our Infrastructure Business in connection with the development and sale of certain residential real estate between the report reviewed by the chief executive officer and the consolidated financial statements. See Notes 3 and 40 to the Consolidated Financial Statements.
Environmental, Social and Governance
Our Environmental, Social and Governance (“ESG”) management focuses on sustainable social communities and governance enhancements that promote tangible value. These principles drive our five comprehensive ESG strategies covering the following key areas.
Green Competency
We strive to respond to global climate change through development of low-carbon processes, energy efficiency and low-carbon products and services, thereby reducing our environmental impact to create a future in which people and nature co-exist and thrive together. POSCO declared the 2050 Carbon Neutrality Roadmap by setting targets for a 30% carbon emissions reduction by 2035, 50% by 2040, and Net Zero emissions by 2050. Initiatives such as low carbon technology and hydrogen reduction are underway to support these goals.
Responsible Value Chain
We are committed to empowering our business partners to obtain the highest standards in various domains, including low carbon technology, human rights and safety, while promoting sustainability across the value chain.
POSCO procures all tin, tantalum, tungsten and gold minerals from refineries in conflict-affected and high-risk areas that have obtained Responsible Minerals Assurance Process (“RMAP”) certification. POSCO Future M, a producer of rechargeable battery materials, also procures tungsten and cobalt, sourcing exclusively from smelters that have either obtained RMAP certification or are currently in the process of obtaining RMAP certifications.
Employee Happiness
We prioritize establishing a secure and inclusive work environment that upholds human rights, embraces diversity and empowers creative talents to lead a period of transformation. As United Nations Global Compact members, POSCO HOLDINGS INC., POSCO, POSCO INTERNATIONAL
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and POSCO E&C, advocate for management based on human rights, diversity and inclusion policies. In addition, POSCO Group proclaimed a “Group Human Rights Commitment” to implement human rights management in line with global standards and to establish a more structured human rights management system at the group level. Our human rights policy covers protections for POSCO Group employees and staffs of our suppliers and labor union rights, encompassing human rights, grievance handling and victim relief. Our diversity, equality and inclusion policies prohibit all forms of discrimination, workplace harassment and sexual harassment, with training, reporting, consultation and investigation processes, as well as whistleblower protection measures that are clearly outlined.
Ethics & Integrity
We are committed to making our business decisions based on unwavering ethical principles by upholding the highest standards of ethics and compliance. Our efforts to enhance ethics and compliance levels are complemented by our commitment to promoting fair trade practices. For example, we established a “Clean Committee,” which is an advisory body involving external experts, to strengthen our commitment to ethical management. We conduct annual questionnaire surveys targeting employees of our suppliers and our domestic and overseas subsidiaries to assess the risk of unethical behavior, workplace harassment and human rights violations. Additional monitoring and investigation are conducted when risks are identified.
New Governance for Real Value
We enhance independence, expertise and diversity of the board of directors to promote real value management by safeguarding shareholder rights and ensuring transparent disclosures, with the aim of enhancing the value of the POSCO Group. A group-level ESG risk response system has been established to address internal and external risks effectively, with significant ESG-related decisions made through the board of directors. For in-depth discussions on key ESG issues, we operate the “POSCO Group ESG Council,” led by top management and the “ESG Session” involving all directors.
Additional information regarding our ESG performance is provided in the POSCO Holdings Sustainability Report, available on our website. This report is not incorporated by reference into, and does not form part of, this Annual Report on Form 20-F.
POSCO is the largest fully integrated steel producer in Korea, and one of the largest steel producers in the world, based on annual crude steel production. We, through POSCO and our other steel-producing subsidiaries, produced approximately 38.6 million tons of crude steel in 2025, a significant majority of which was produced at Pohang Works and Gwangyang Works. As of December 31, 2025, we had approximately 44.5 million tons of annual crude steel production capacity, including 39.8 million tons of production capacity in Korea. We believe Pohang Works and Gwangyang Works are two of the most technologically-advanced integrated steel facilities in the world. We manufacture and sell a diversified line of steel products, including cold rolled and hot rolled products, stainless steel products, plates, wire rods and silicon steel sheets, and we are able to meet a broad range of customer needs from manufacturing industries that consume steel, including automotive, shipbuilding, home appliance, engineering and machinery industries.
POSCO M-TECH Co., Ltd., which is also included in the Steel Segment, produces aluminum deoxidizers used to remove excess oxygen during the steel manufacturing process to improve durability of steel products, and it also provides integrated steel product packaging solutions for steel production facilities.
Korea is our most important market. Domestic sales accounted for 38.3% of the Steel Segment’s total revenue in 2025 and 37.2% in 2024. We believe that POSCO’s steel products
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constituted approximately 46.6% of the total sales volume of such steel products sold in Korea in 2025 and approximately 46.0% in 2024. The Steel Segment’s export sales and overseas sales to customers abroad accounted for 61.7% of the Steel Segment’s total revenue in 2025 and 62.8% in 2024. The Steel Segment’s major export market is Asia, with Asia other than China and Japan accounting for 22.5%, China accounting for 19.0% and Japan accounting for 11.0% of the Steel Segment’s total steel export revenue in 2025, and Asia other than China and Japan accounting for 23.2%, China accounting for 20.7% and Japan accounting for 11.2% of the Steel Segment’s total steel export revenue in 2024.
Major Products
We, through POSCO and our other steel-producing subsidiaries, manufacture and sell a broad line of steel products, including the following:
cold rolled products;
hot rolled products;
stainless steel products;
plates;
wire rods; and
silicon steel sheets.
The table below sets out our revenue of steel products produced by us and directly sold to external customers which are recognized as external revenue of the Steel Segment, by major steel product category for the periods indicated. Such amounts do not include steel products produced by us and sold to our consolidated sales subsidiaries (including POSCO INTERNATIONAL).
Steel Products
Cold rolled products
Hot rolled products
Stainless steel products
Plates
Wire rods
Silicon steel sheets
Sub-total
Others
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The table below sets out our sales volume of the principal categories of steel products produced by us and directly sold to external customers, which are recognized as external sales volume of the Steel Segment, by major steel product category for the periods indicated. Such amounts do not include steel products produced by us and sold to our sales consolidated subsidiaries (including POSCO INTERNATIONAL).
Total (1)
Not including sales volume of steel products categorized under “others.”
In addition to steel products produced by us and directly sold to external customers, we engage our consolidated sales subsidiaries (including POSCO INTERNATIONAL) to sell our steel products produced by us. Our revenue from steel products produced by us and sold to our consolidated sales subsidiaries that in turn sold them to their external customers amounted to Won 9,414 billion in 2023, Won 9,452 billion in 2024 and Won 8,801 billion in 2025. Sales of such steel products by our consolidated sales subsidiaries to external customers are recognized as external revenue of the Trading Segment of our Infrastructure Business.
Cold Rolled Products
Cold rolled coils and further refined galvanized cold rolled products are used mainly in the automotive industry to produce car body panels. Other users include the household goods, electrical appliances, engineering and metal goods industries.
Our deliveries of cold rolled products produced by us and directly sold to external customers amounted to 10,529 thousand tons in 2025, representing 36.4% of our total sales volume of principal steel products produced by us and directly sold to external customers. Cold rolled products constitute our largest product category in terms of sales volume and revenue from steel products produced by us and directly sold to external customers.
We believe POSCO had a domestic market share for cold rolled products of approximately 54% in 2025.
Hot Rolled Products
Hot rolled coils and sheets have many different industrial applications. They are used to manufacture structural steel used in the construction of buildings, industrial pipes and tanks, and automobile chassis. Hot rolled coil is also manufactured in a wide range of widths and thicknesses as the feedstock for higher value-added products such as cold rolled products and silicon steel sheets. The largest customers of our hot rolled products are downstream steelmakers in Korea which use the products to manufacture pipes and cold rolled products.
Our deliveries of hot rolled products produced by us and directly sold to external customers amounted to 9,583 thousand tons in 2025, representing 33.1% of our total sales volume of principal steel products produced by us and directly sold to external customers. Hot rolled products constitute
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our second largest product category in terms of sales volume and revenue from steel products produced by us and directly sold to external customers.
We believe POSCO had a domestic market share for hot rolled products of approximately 54% in 2025.
Stainless Steel Products
Stainless steel products are used to manufacture household goods and are also used by the chemical industry, paper mills, the aviation industry, the automotive industry, the construction industry and the food processing industry.
Our deliveries of stainless steel products produced by us and directly sold to external customers amounted to 2,364 thousand tons in 2025, representing 8.2% of our total sales volume of principal steel products produced by us and directly sold to external customers. Stainless steel products constitute our third largest product category in terms of revenue from steel products produced by us and directly sold to external customers. Although sales of stainless steel products accounted for only 8.2% of total sales volume of the principal steel products produced by us and directly sold to external customers in 2025, they represented 18.7% of our total revenue from such steel products in 2025.
We believe POSCO had a domestic market share for stainless steel products of approximately 52% in 2025.
Plates are used in shipbuilding, structural steelwork, offshore oil and gas production, power generation, mining, and the manufacture of earth-moving and mechanical handling equipment, boiler and pressure vessels and other industrial machinery. The Korean shipbuilding industry, which uses plates to manufacture chemical tankers, rigs, bulk carriers and containers, and the construction industry are our largest customers of plates.
Our deliveries of plates produced by us and directly sold to external customers amounted to 4,523 thousand tons in 2025, representing 15.6% of our total sales volume of principal steel products produced by us and directly sold to external customers.
We believe POSCO had a domestic market share for plates of approximately 45% in 2025.
Wire Rods
Wire rods are used mainly by manufacturers of wire, fasteners, nails, bolts, nuts and welding rods. Wire rods are also used in the manufacture of coil springs, tension bars and tire cords in the automotive industry. The largest customers for our wire rods are manufacturers of wire ropes and fasteners.
Our deliveries of wire rods produced by us and directly sold to external customers amounted to 1,309 thousand tons in 2025, representing 4.5% of our total sales volume of principal steel products produced by us and directly sold to external customers.
We believe POSCO had a domestic market share for wire rods of approximately 44% in 2025.
Silicon Steel Sheets
Silicon steel sheets are used mainly in the manufacture of power transformers and generators, rotating machines and electric motors.
Our deliveries of silicon steel sheets produced by us and directly sold to external customers amounted to 641 thousand tons in 2025, representing 2.2% of our total sales volume of principal steel products produced by us and directly sold to external customers.
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We believe POSCO had a domestic market share for silicon steel sheets of approximately 71% in 2025.
Other products include lower value-added semi-finished products such as pig iron, billets, blooms and slab.
Korea is our most important market. Domestic sales represented 38.3% of the Steel Segment’s total revenue in 2025. The Steel Segment’s export sales and overseas sales to customers abroad represented 61.7% of the Steel Segment’s total revenue in 2025. Our sales strategy has been to devote our production primarily to satisfy domestic demand, while seeking export sales to utilize capacity to the full extent and to expand our international market presence.
Domestic Market
We primarily sell in Korea higher value-added and other finished products to end-users and semi-finished products to other steel manufacturers for further processing. Local distribution companies and sales affiliates sell finished steel products to low-volume customers. We provide service technicians for large customers and distributors in each important product area.
The table below sets out our estimate of the market share of our steel products in Korea for the periods indicated based on sales volume.
Source
POSCO’s sales (1)
Other domestic steel companies’ sales
Imports
POSCO’s sales volume includes steel products produced by POSCO (but not by our other subsidiaries) and sold through our consolidated sales subsidiaries as well as steel products produced by POSCO (but not by our other subsidiaries) and directly sold to external customers.
Exports
The Steel Segment’s export sales and overseas sales to customers abroad represented 61.7% of the Steel Segment’s total revenue in 2025, 52.5% of which was generated from exports sales and overseas sales to customers in Asian countries. The Steel Segment’s export sales and overseas sales to customers abroad in terms of such revenue decreased by 6.9% from Won 31,829 billion in 2024 to Won 29,627 billion in 2025.
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The tables below set out our export sales and overseas sales to customers abroad in terms of revenue from steel products produced and sold by us (including our consolidated sales subsidiaries), by geographical market and by major product category for the periods indicated.
Region
Asia (other than China and Japan)
China
Europe
Japan
North America
Middle East
We distribute our export products mostly through Korean trading companies, including POSCO INTERNATIONAL, and our overseas sales subsidiaries. Our largest export market in 2025 was Asia (other than China and Japan), which accounted for 22.5% of our export revenue from steel products produced and sold by us. The principal products exported to Asia (other than China and Japan) were cold rolled products, including continuous galvanized products. Our exports to Asia (other than China and Japan) decreased by 9.8% from Won 7,382 billion in 2024 to Won 6,662 billion in 2025 primarily reflecting a general decline in demand from the region.
Our second largest export market in 2025 was China, which accounted for 19.0% of our export revenue from steel products produced and sold by us. The principal products exported to China were stainless steel products. Our exports to China decreased by 14.2% from Won 6,576 billion in 2024 to Won 5,642 billion in 2025 primarily due to a slowdown in economic activity in China.
Anti-Dumping, Safeguard and Countervailing Duty Proceedings
Our subsidiaries sell a significant portion of their products outside Korea as well as engage in trading activities worldwide, and, from time to time, we are involved in trade remedy proceedings in various jurisdictions. We actively participate in such proceedings to minimize adverse effects and related risks. Although trade remedy actions and regulatory scrutiny have increased in recent years, such cases have historically been limited in scope relative to our overall global sales and operations. Through our trade affairs office, we continue to closely monitor developments in trade remedy policies, including anti-dumping duties, safeguard duties, countervailing duties, quotas and tariffs, in all major markets in which we operate, and seek to mitigate related risks by adjusting supply chains, production and export arrangements and, where necessary, defend our interests. However, there can be no assurance that free trade agreements between Korea and its major trading partners
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will remain unchanged, or that new or increased anti-dumping duties, safeguard duties, countervailing duties, quotas or tariffs will not be imposed on our products in the future. The occurrence of any such events, including those described below, may have a material adverse effect on our business, financial condition and results of operations.
Historically, tariffs have led to increased trade and political tensions. In response to the recent tariffs imposed by the U.S. government, various countries have implemented, or have announced plans to implement, retaliatory tariffs on goods produced in the United States. These retaliatory measures, along with the broader trend of unilateral trade actions, could trigger a cycle of trade disputes. Such political and economic tensions as a result of trade policies could reduce trade volume, investment, technological exchange and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets. Consequently, there can be no assurance that our proactive mitigation measures will be sufficient to offset the risks of evolving trade policies. If further tariffs are imposed on a broader range of our exports or our customers’ exports, or if further retaliatory trade measures are adopted by affected countries, we or our customers may be required to adjust pricing, modify supply or sourcing arrangements or incur additional costs, any of which may have a material adverse impact on our business, financial condition and results of operations.
Pricing Policy
We determine the pricing of our products based on market conditions, taking into consideration production outlook of the global steel industry and global economic conditions in general. In setting prices, we take into account our costs, including those of raw materials, supply and demand in the Korean market, exchange rates, and conditions in the international steel market. Our prices can fluctuate considerably over time, depending on market conditions and other factors. The prices of our higher value-added steel products in the largest markets are determined considering the prices of similar products charged by our competitors.
Raw Materials
Steel Production
The principal raw materials used in producing steel through the basic oxygen steelmaking method are iron ore and coal. We import all of the coal and virtually all of the iron ore that we use. In
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2025, POSCO imported approximately 49 million dry metric tons of iron ore and 24 million wet metric tons of coal. Iron ore is imported primarily from Australia, Brazil and Canada. Coal is imported primarily from Australia, Canada and the United States.
We purchase a substantial portion of our iron ore and coal imports pursuant to long-term contracts. Our long-term supply contracts generally have terms of three to ten years and provide for periodic price adjustments to the then-market prices. We typically adjust the prices on a quarterly basis and maintain approximately one month of inventory of raw materials. Such price adjustments are driven by various factors, including the global economic outlook, global market prices of raw materials and steel products, supply and demand outlook of raw materials and production costs of raw materials. For both coal and iron ore, we typically agree on the purchase price with the suppliers primarily based on the spot market price periodically announced by Platts (Premium Low Vol Coking Coal, FOB Australia Index and Iron Ore 62% Fe, CFR China Index). We or the suppliers may cancel the long-term contracts only if performance under the contracts is prevented by causes beyond our or their control and these causes continue for a specified period.
We also engage in exploration and production projects abroad to enhance our ability to meet the requirements for high-quality raw materials, by acquiring mining rights of raw materials or by investing in projects either as part of a consortium or through an acquisition of a minority interest. In 2025, we purchased approximately 37% of our iron ore imports and 25% of our coal imports from foreign mines in which we have made investments. Our major investments to procure supplies of coal, iron ore and nickel are primarily located in Australia, Canada, Brazil and New Caledonia. We will continue to selectively seek opportunities to enter into additional strategic relationships that would enhance our ability to meet the requirements for principal raw materials.
The average market price of iron ore per dry metric ton (Iron Ore 62% Fe, CFR China Index announced by Platts) was US$120 in 2023, US$109 in 2024 and US$102 in 2025. The average market price of coal per wet metric ton (Premium Low Vol Coking Coal, FOB Australia Index announced by Platts) was US$296 in 2023, US$240 in 2024 and US$188 in 2025. We currently do not depend on any single country or supplier for our coal or iron ore.
Stainless Steel Production
The principal raw materials for the production of stainless steel are ferronickel, ferrochrome and stainless steel scrap. We purchase a majority of our ferronickel primarily from suppliers in Korea that procure nickel ore from New Caledonia, and the remainder primarily from leading suppliers in Indonesia. Our primary suppliers of ferrochrome are located in South Africa, India and Kazakhstan. Our stainless steel scraps are primarily supplied by domestic and overseas suppliers in Japan and Southeast Asia. Revert scraps from the Pohang Steelworks and our overseas subsidiaries are also used for our stainless steel production. The average market price of nickel per ton on the London Metal Exchange was US$21,474 in 2023, US$16,812 in 2024 and US$15,160 in 2025.
Transportation
In order to meet our transportation needs for iron ore and coal, we have entered into long-term contracts with shipping companies. Such contracts are performed by a fleet of dedicated vessels on a consecutive voyage basis with fully loaded cargo for each voyage. These vessels under long-term contracts transported approximately 59% of the total requirements in 2025, and the remaining approximately 41% was transported by vessels sourced through short- to medium-term contracts, depending on market conditions. We plan to continue to optimize the fleet of dedicated vessels that we use in order to cope with changes in the global shipping environment, as well as upgrade some of the existing vessels with energy-saving and eco-friendly technologies.
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The Steelmaking Process
POSCO’s major production facilities, Pohang Works and Gwangyang Works, produce steel by the basic oxygen steelmaking method. The stainless steel plant at Pohang Works produces stainless steel by the electric arc furnace method. Continuous casting improves product quality by imparting a homogenous structure to the steel. Pohang Works and Gwangyang Works produce all of their products through the continuous casting.
Steel — Basic Oxygen Steelmaking Method
First, molten pig iron is produced in a blast furnace from iron ore, which is the basic raw material used in steelmaking. Molten pig iron is then refined into molten steel in converters by blowing pure oxygen at high pressure to remove impurities. Different desired steel properties may also be obtained by regulating the chemical contents.
At this point, molten steel is made into semi-finished products such as slabs, blooms or billets at the continuous casting machine. Slabs, blooms and billets are produced at different standardized sizes and shapes. Slabs, blooms and billets are semi-finished lower-margin products that we either use to produce our further processed products or sell to other steelmakers that produce further processed steel products.
Slabs are processed to produce hot rolled coil products at hot strip mills or to produce plates at plate mills. Hot rolled coils are an intermediate-stage product that may either be sold to our customers as various finished products or be further processed by us or our customers into higher value-added products, such as cold rolled sheets and silicon steel sheets. Blooms and billets are processed into wire rods at wire rod mills.
Stainless Steel — Electric Arc Furnace Method
Stainless steel is produced from stainless steel scrap, chrome, nickel and steel scrap using an electric arc furnace. Stainless steel is then processed into higher value-added products by methods similar to those used for steel production. Stainless steel slabs are produced at a continuous casting mill. The slabs are processed at hot rolling mills into stainless steel hot coil, which can be further processed at cold strip mills to produce stainless cold rolled steel products.
Steel Making Operations Located Outside Korea
In order to effectively implement our strategic initiatives and to solidify our leadership position in the global steel industry, we have established various subsidiaries and joint ventures in Korea and elsewhere around the world that engage in steel production activities.
China. We entered into an agreement with Shagang Group Co. to establish POSCO (Zhangjiagang) Stainless Steel Co., Ltd. (“POSCO (Zhangjiagang)”), a joint venture company in China for the manufacture and sale of stainless cold rolled steel products. POSCO HOLDINGS INC. has an 82.5% interest in the joint venture (including 23.9% interest held by POSCO China Holding Corporation). POSCO (Zhangjiagang) commenced production of stainless cold rolled steel products in December 1998. In 2025, POSCO (Zhangjiagang) had an annual production capacity of 1,100 thousand tons of stainless steel products. We resolved to sell our equity interest in POSCO (Zhangjiagang) at the meeting of the board of directors held in July 2025. See “Item 4.D. Property, Plants and Equipment — Steel Production Facilities Abroad — POSCO (Zhangjiagang).”
Indonesia. We entered into an agreement with PT. Krakatau Steel (Persero) Tbk. to establish PT. KRAKATAU POSCO Co., Ltd. (“PT. KRAKATAU POSCO”), a joint venture company in Indonesia for the manufacture and sale of plates and slabs. POSCO holds a 50.0% interest in the joint venture. We completed the construction of a steel manufacturing plant in December 2013. In 2025, PT.
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KRAKATAU POSCO had an annual production capacity of 3,000 thousand tons of slabs, plates and hot rolled coils. See “Item 4.D. Property, Plants and Equipment — Steel Production Facilities Abroad — PT. KRAKATAU POSCO.”
Vietnam. We established POSCO YAMATO VINA STEEL JOINT STOCK COMPANY (“POSCO YAMATO VINA” and formerly known as POSCO SS VINA JOINT STOCK COMPANY), a subsidiary engaged in the manufacture and sale of shape steel and steel reinforcement products. POSCO holds a 51.0% interest in POSCO YAMATO VINA, and the plant became operational in June 2015. In 2025, POSCO YAMATO VINA had an annual production capacity of 550 thousand tons of shape steel products. See “Item 4.D. Property, Plants and Equipment — Steel Production Facilities Abroad — POSCO YAMATO VINA.”
Competition
POSCO is the largest fully integrated steel producer in Korea. In hot rolled products, where we believe POSCO had a domestic market share of approximately 54% in 2025, we face competition from Hyundai Steel Co., Ltd. and from various foreign producers, primarily from China and Japan. In cold rolled products and stainless steel products, where we believe POSCO had domestic market shares of approximately 54% and 52%, respectively, in 2025, we compete with Hyundai Steel Co., Ltd., smaller specialized domestic manufacturers and various foreign producers, primarily from China and Japan. For a discussion of domestic market shares, see “— Markets — Domestic Market.”
The Government has imposed provisional anti-dumping duties on certain thick steel plates and stainless-steel plates from China.
Export Markets
The competitors in our export markets include all the leading steel manufacturers of the world. In the past decade, there has been a trend toward industry consolidation among our competitors, and smaller competitors in the global steel market today may become larger competitors in the future. In recent years, a slowdown in domestic demand for steel products in China resulting from slowed economic growth, combined with an expansion in steel production capacity, has led to production over-capacity in the Chinese steel industry, which in turn has led the Chinese government to pursue aggressive consolidation in the Chinese steel industry that has resulted in fewer but larger steel manufacturers that are able to compete more effectively in the global steel industry. Competition from global steel manufacturers with significant production capacity such as ArcelorMittal S.A. and Nippon Steel & Sumitomo Metal Corporation, as well as competitors from emerging markets, especially from China and India, could result in a significant increase in competition. Major competitive factors include range of products offered, quality, price, delivery performance and customer service. Our larger competitors may use their resources, which may be greater than ours, against us in a variety of ways, including by making additional acquisitions, investing more aggressively in product development and capacity and displacing demand for our export products.
Various export markets currently impose tariffs on different types of steel products. Through pursuing direct investments in high-growth overseas markets and leveraging our overseas production subsidiaries, we seek to improve our ability to respond to country-specific trade regulations and market dynamics while reinforcing our global competitiveness.
Infrastructure Business
Trading Segment
Our trading activities consist primarily of trading activities of POSCO INTERNATIONAL. POSCO INTERNATIONAL is a global trading company that primarily engages in trading of steel and raw
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materials, investing in energy and mineral development projects and operating power generation facilities. It also trades textiles, agricultural commodities and other goods. POSCO INTERNATIONAL’s sales consist of third-country trading sales, export trading sales and domestic trading sales. On January 1, 2023, POSCO Energy, Korea’s largest domestic private power utility company and a provider of alternative environmentally-friendly energy solutions, merged into POSCO INTERNATIONAL.
The following table sets forth a breakdown of POSCO INTERNATIONAL’s total consolidated revenue by export sales, domestic sales and third-country trades for the periods indicated:
Revenue Category
Export trading revenue
Domestic trading revenue
Third-country trades
Total revenue prior to consolidation adjustments
Consolidation adjustments
Total revenue
Including revenue from the power generation business of POSCO Energy, which merged into POSCO INTERNATIONAL on January 1, 2023.
Trading Activities. POSCO INTERNATIONAL’s trading activities consist of exporting and importing a wide variety of products and commodities, including iron and steel, raw materials for steel production, non-ferrous metals, chemicals, automotive parts (including motor cores), machinery and plant equipment, electronics products, agricultural commodities and textiles. POSCO INTERNATIONAL is also engaged in third-country trade that does not involve exports from or imports to Korea. The products are obtained from and supplied to numerous suppliers and purchasers in Korea and overseas, which are procured through a global trading network comprised of overseas trading subsidiaries, branches and representative offices. Such subsidiaries and offices support POSCO INTERNATIONAL’s trading activities by locating suitable local suppliers and purchasers on behalf of customers, identifying business opportunities and providing information regarding local market conditions.
In most cases, POSCO INTERNATIONAL enters into trading transactions after the underlying sale and purchase contracts have been matched, which mitigates inventory and price risks to POSCO INTERNATIONAL. POSCO INTERNATIONAL typically enters into trading transactions as a principal, and in limited cases as an import or export agent. When acting as a principal or an agent, POSCO INTERNATIONAL derives its gross trading profit from the margin between the selling price of the products and the purchase price it pays for such products. In the case of principal transactions, the selling price is recognized as sales and the purchase price is recognized as cost of sales, while only the margin is recognized as sales in the case of agency transactions in which POSCO INTERNATIONAL does not control each good or service prior to providing the goods or services to the customer (indicators of such control include (1) primary responsibility for fulfilling the promise to provide the specified good or service, (2) inventory risk and (3) discretion in establishing the price of the specified good or service). In the instances in which it acts as an arranger for a third country transaction, POSCO INTERNATIONAL derives its gross trading profit from, and recognizes as sales, the commission paid to it by the customer. The sizes of margins and commissions for POSCO INTERNATIONAL’s trading activities vary depending on a number of factors, including prevailing supply and demand conditions for the product involved, the cost of financing, insurance, storage and transport and the creditworthiness of the customer, and tends to decline as the product or market matures.
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In connection with its export and import transactions, POSCO INTERNATIONAL has trade accounts and notes receivable and payable in a number of currencies, but principally in U.S. dollars. POSCO INTERNATIONAL’s exposure to fluctuations in exchange rates, including the Won/U.S. dollar exchange rate, is limited because trading transactions typically involve matched purchase and sale contracts, which result in limited settlement exposure, and because POSCO INTERNATIONAL’s contracts with domestic suppliers of products for export and with domestic purchasers of imported products are generally denominated in U.S. dollars. Although the impact of exchange rate fluctuations is substantially mitigated by such strategies, POSCO INTERNATIONAL also periodically enters into derivative contracts, primarily currency forward contracts, to further hedge its foreign exchange risks.
In connection with its trading activities, POSCO INTERNATIONAL arranges insurance and product transport at the request of customers, the costs of which generally become reflected in the sales price of the relevant products, and also provides financing services to its purchasers and suppliers as necessary. In the case of trading transactions involving large-scale industrial or construction projects, POSCO INTERNATIONAL also provides necessary project planning and organizing services to its customers.
Natural Resources Development Activities. POSCO INTERNATIONAL also invests in energy and mineral development projects throughout the world. In particular, POSCO INTERNATIONAL holds a 51.0% interest in a gas field project in Myanmar, where production of gas commenced in July 2013. POSCO INTERNATIONAL recognized revenue of Won 615 billion in 2023, Won 605 billion in 2024 and Won 647 billion in 2025 from the Myanmar gas field project. Natural resources development projects, while entailing higher risks than the traditional trading business, offer higher potential returns. POSCO INTERNATIONAL intends to continue to expand its operations by carefully seeking out promising energy development projects abroad.
Power Generation Activities. POSCO INTERNATIONAL acquired the power generation business of POSCO Energy through its merger into POSCO INTERNATIONAL on January 1, 2023. POSCO INTERNATIONAL operates power generation facilities in Korea and Southeast Asia, including LNG combined cycle power plants. As of December 31, 2025, POSCO INTERNATIONAL’s total power generation capacity of its LNG combined cycle power plants was approximately 3,412 megawatts. As of such date, POSCO INTERNATIONAL’s total power generation capacity of its renewable solar energy facilities was approximately 15 megawatts and its onshore wind power energy facilities was approximately 63 megawatts.
POSCO INTERNATIONAL also operates an LNG receiving terminal with an aggregate capacity to process approximately 6.0 million tons of LNG annually in Gwangyang as of December 31, 2025. In addition, POSCO INTERNATIONAL participates in LNG trading, LNG tank rental services and LNG ship trial operations in order to achieve maximum operational efficiency of our LNG terminal.
POSCO INTERNATIONAL also engages in fuel cell facility installation and operation services, as well as selectively seeks opportunities to expand into solar, wind and other renewable energy businesses in order to become an integrated provider of energy solutions.
POSCO INTERNATIONAL competes principally with other Korean general trading companies that are affiliated with major domestic business groups, as well as global trading companies based in other countries. In the domestic market, competition for export transactions on behalf of domestic suppliers and import transactions on behalf of domestic purchasers was limited, as most affiliated general trading companies of large Korean business groups generally relied on affiliate transactions for the bulk of their trading business. However, in recent years, many of these Korean general trading companies have reduced their reliance on their affiliated business group and transactions carried out on behalf of their member companies and instead have generally evolved to focus on segments of the import and export markets in which they have a competitive advantage. As a result, competition among
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Korean general trading companies in the area of traditional trade has become more intense. POSCO INTERNATIONAL’s principal competitors in the overseas trading markets include Korean trading companies that operate in various international markets, as well as foreign trading companies, particularly those based in Japan. As POSCO INTERNATIONAL diversifies into businesses other than traditional trading such as natural resources development, it also increasingly competes with other Korean and international companies involved in these businesses. POSCO INTERNATIONAL’s power generation business competes principally with private-sector power generation companies in Korea that are affiliated with major domestic business groups, including SK Innovation Co., Ltd. and GS EPS Co., Ltd.
POSCO E&C is one of the leading engineering and construction companies in Korea, primarily engaged in the planning, design and construction of industrial plants and architectural works and civil engineering projects. In particular, POSCO E&C has established itself as one of the premier engineering and construction companies in Korea through:
its strong and stable customer base; and
its cutting-edge technological expertise obtained from construction of advanced integrated steel plants, as well as participation in numerous modernization and rationalization projects at our Pohang Works and Gwangyang Works.
Leveraging its technical know-how and track record of building some of the leading industrial complexes in Korea, POSCO E&C has also focused on diversifying its operations into construction of high-end apartment complexes and participating in a wider range of architectural works and civil engineering projects, as well as engaging in urban planning and development projects and expanding its operations abroad. In September 2015, we completed the sale of a 38.0% interest in POSCO E&C to Public Investment Fund (“PIF”), a sovereign wealth fund in Saudi Arabia, for US$1.05 billion. In connection with the sale, POSCO E&C and PIF agreed to jointly explore additional business opportunities in Saudi Arabia, including participating in various infrastructure projects sponsored by the Saudi Arabian government.
POSCO E&C also has substantial experience in the energy field obtained from the construction of various power plants for member companies of the POSCO Group, specializing primarily in engineering and construction of LNG-fired thermal power plants. In response to increasing demand from the energy industry, POSCO E&C plans to continue to target opportunities in power plant construction, especially in Asia and Africa, which it believes offers significant growth potential.
Competition in the construction industry is based primarily on price, reputation for quality, reliability, punctuality and financial strength of contractors. In Korea, POSCO E&C’s main competition in the construction of residential and non-residential buildings, EPC projects, urban planning and development projects and civil works projects consists of approximately ten major domestic construction companies, all of which are member companies of other large business groups in Korea and are capable of undertaking larger-scale, higher-value-added projects that offer greater potential returns. A series of measures introduced by the Government over the past few years to regulate housing prices in Korea, as well as an increasing popularity of low-bid contracts in civil works project mandates, have contributed to increased competition in the Korean construction industry in recent years. In the overseas markets, POSCO E&C faces competition from local construction companies and other major Korean construction companies with overseas operations, as well as international construction companies from other countries.
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Logistics and Others Segment
POSCO DX. POSCO DX provides a wide range of information technology and operational technology services. In particular, POSCO DX has expertise in providing services to address the evolving needs of manufacturing companies arising from the convergence of information technology and operational technology.
POSCO DX’s information technology services primarily consist of buildout and management of information technology infrastructure, including manufacturing execution systems, supply chain management systems, and enterprise resource planning systems. POSCO DX also serves as a managed service provider for the operation of cloud data centers on behalf of its clients, and provides other smart technology services including smart CCTV and smart home solutions.
POSCO DX’s operational technology services primarily relate to automation of factory equipment and manufacturing processes and provision of energy efficiency solutions. POSCO DX also provides system engineering services targeting specific areas of operational processes, including automation of logistical operations and buildout and management of pollutant monitoring systems and intelligent transportation systems. For example, POSCO DX implemented a baggage handling system that is a comprehensive logistics system that automatically classifies and transports passenger baggage to the boarding aircraft at Incheon International Airport. In addition, POSCO DX utilizes digital twin, a convergence technology that replicates a real-world object in a virtual environment, to improve decision-making and optimize processes. POSCO DX also provides industrial robot automation services ranging from consulting, design, construction and operation relating to robot applications based on software technology.
POSCO FLOW. POSCO FLOW provides a wide range of integrated logistics services. It engages in the operation of central terminal systems for transportation, storage and processing of raw materials. POSCO FLOW also offers optimized logistics solutions for a wide range of products including steel products, industrial parts, grains, natural gas and construction equipment and materials.
Competition. POSCO DX competes principally with system integration service providers in Korea that are affiliated with major domestic business groups, including Samsung SDS Co., Ltd., LG CNS Co., Ltd. and SK Inc. AX. POSCO FLOW competes principally with logistics service providers in Korea that are affiliated with major domestic business groups, including Hyundai Glovis Co., Ltd., Samsung SDS Co., Ltd. and LX Pantos Co., Ltd.
POSCO Future M
POSCO Future M manufactures cathode and anode materials, which are two of the main components of rechargeable batteries. POSCO Future M sells such materials primarily to Korea’s leading electric vehicle battery manufacturers such as LG Energy Solution, Ltd., Samsung SDI Co., Ltd. and SK On Co., Ltd., as well as to their joint ventures with global automotive manufacturers.
POSCO Future M also manufactures quicklime and refractories used in steel manufacturing processes and other industrial applications as well as a wide range of chemical products such as coal tar and light oil. Quicklime is a widely used chemical component in a variety of industries. In the steel industry, a major use of quicklime is to remove impurities in the basic oxygen steelmaking process. Refractories are materials that are resistant to high temperature, used predominantly as furnace linings for elevated temperature materials processing and other applications in which thermomechanical properties are critical.
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The following table sets forth a breakdown of POSCO Future M’s total consolidated revenue by major product categories for the periods indicated:
Products
Energy materials (including battery materials)
Quicklime and other chemical products
Refractories
Competition. In the energy materials market, POSCO Future M competes with other global leading manufacturers of cathode and anode materials, including LG Chemical Co., Ltd. and Ecopro BM Co., Ltd. In its legacy business areas of refractories and lime chemicals, POSCO Future M competes principally with Chosun Refractories ENG Co., Ltd. and Korea Refractories Co., Ltd.
Investments in Lithium Hydroxide and Lithium Carbonate Production Projects
Through investments made by POSCO HOLDINGS INC., we engage in natural resources development and production projects for lithium hydroxide and lithium carbonate, which are key materials for the production of cathode materials.
POSCO Argentina. In 2018, POSCO Argentina, a wholly owned subsidiary of POSCO HOLDINGS INC., acquired a salt lake located in Salta and Catamarca provinces of Argentina. In October 2024, POSCO Argentina completed stage one of its construction of a commercialization plant adjacent to the lake for the production of lithium hydroxide.
As of December 31, 2025, the construction schedule and related costs of the project were as follows:
Project
Construction of salt water lithium commercialization plant – stage two
Upon completion of both stages, the commercialization plant is expected to have an annual production capacity of 25 thousand tons of lithium hydroxide and 23 thousand tons of lithium carbonate.
POSCO Pilbara Lithium Solution. In 2018, we acquired a 2.74% stake in PLS Group Limited (“PLS”) and secured off-taking of spodumene mineral from the Pilgangoora Project, which is located 120 kilometers from Port Hedland in Western Australia’s resource-rich Pilbara region. POSCO Pilbara Lithium Solution, a joint venture with PLS in which POSCO HOLDINGS INC. holds a 82% interest, completed construction of a commercialization plant in Yulchon industrial complex in Gwangyang for the production of lithium hydroxide in November 2024. The facility has a total annual capacity of 43 thousand tons of lithium hydroxide, comprising two plants with a capacity of 21.5 thousand tons each.
Our Others Segment includes POSCO HOLDINGS INC. and all other entities which fall below the reporting thresholds. POSCO HOLDINGS INC. actively explores diversification opportunities in promising business areas.
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Insurance
We maintain property insurance for our property, plant and equipment that we believe to be consistent with market practice in Korea.
Government Regulations
Pursuant to the Monopoly Regulation and Fair Trade Act of Korea, we, as a non-financial holding company, are required to maintain the shareholding ratio of our subsidiaries above a certain threshold (i.e., 30% in case of a public company and 50% in case of a private company) and are also required to maintain our liabilities-to-equity ratio below 200%. In addition, we may not own the shares of any Korean companies that are not our affiliates in excess of 5% of the total outstanding shares of such company (except under certain exempted cases) nor control any Korean financial institutions or insurance companies. We are also required to annually report to the Korea Fair Trade Commission whether we have complied with such restrictive requirements. In the event we breach such obligations, we will be subject to criminal penalty.
Item 4.C. Organizational Structure
The following table sets out the jurisdiction of incorporation and our ownership interests of our significant subsidiaries as of December 31, 2025:
Name
POSCO
POSCO INTERNATIONAL Corporation
POSCO Eco & Challenge Co., Ltd
POSCO DX Co., Ltd.
POSCO Future M Co., Ltd.
POSCO (Zhangjiagang) Stainless Steel Co., Ltd. (1)
POSCO HOLDINGS INC. holds a 58.6% interest and POSCO-China holds a 23.9% interest. We resolved to sell our equity interest in POSCO (Zhangjiagang) Stainless Steel Co., Ltd. at the meeting of the board of directors held in July 2025.
Property, Plants and Equipment
Overview
Our consolidated subsidiaries operate various production facilities in Korea and abroad. See Note 14 to the Consolidated Financial Statements. We may increase our production capacity in the future when we increase our capacity as part of our facilities expansion or as a result of continued modernization and rationalization of our existing facilities. For a discussion of major items of our capital expenditures currently in progress, see “Item 5. Operating and Financial Review and Prospects — Item 5.B. Liquidity and Capital Resources — Liquidity — Capital Expenditures and Capital Expansion.”
We are vigorous in our efforts to engage in environmentally responsible management of, and to protect the environment from damage resulting from, our operations. We also establish and monitor decarbonization targets, focusing on energy efficiency and the reduction of key environmental emissions, while operating in compliance with applicable environmental laws and permit requirements. POSCO’s levels of pollution control are higher than those mandated by Government standards. POSCO utilizes pollution control facilities to minimize air emissions, outsource wastewater treatment to licensed contractors and conduct periodic and IoT-based monitoring of emission sources in accordance with regulatory standards. POSCO also established an online environmental monitoring system with real-time feedback on pollutant levels and a forecast system of pollutant concentration in surrounding areas. In addition, POSCO undergoes periodic environmental inspections by both internal and external inspectors in accordance with ISO 14001 standards to monitor execution and
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maintenance of its environmental management plan. POSCO also operates a certification program targeting its suppliers, pursuant to which they are encouraged to establish environmental management systems of their own.
POSCO’s principal properties are Pohang Works, which is located at Youngil Bay on the southeastern coast of Korea, and Gwangyang Works, which is located in Gwangyang in the southwestern region of Korea. POSCO also maintains and operates production properties abroad, including plants operated by PT. KRAKATAU POSCO in Indonesia and POSCO YAMATO VINA in Vietnam. POSCO (Zhangjiagang), our consolidated subsidiary, also operates production properties in Zhangjiagang, China for the production of stainless steel products. For a discussion of such operations, see “Item 4. Information on the Company — Item 4.B. Business Overview — Steel Segment — Steel Making Operations Located Outside Korea.”
POSCO INTERNATIONAL’s principal properties are LNG combined cycle power generation facilities located in Incheon and LNG terminal facilities located in Gwangyang.
POSCO Future M’s principal properties are (i) plants for the production of cathode materials located in Korea (Gwangyang and Pohang), Quebec, Canada and Tongxiang, China, (ii) plants for the production of anode materials located in Sejong and Pohang, (iii) plants for the production of quicklime located in Korea (Gwangyang and Pohang) and Banten, Indonesia, and (iv) plants for the production of refractories located in Pohang, Korea and Jiangsu Province, China.
Steel Production Facilities in Korea
Pohang Works
Construction of Pohang Works began in 1970 and ended in 1983. Pohang Works produces a wide variety of steel products. Products produced at Pohang Works include hot rolled sheets, plates, wire rods and cold rolled sheets, as well as specialty steel products such as stainless steel sheets and silicon steel sheets. These products can also be customized to meet the specifications of our customers.
Situated on a site of 8.9 million square meters at Youngil Bay on the southeastern coast of Korea, Pohang Works consists of iron-making, crude steelmaking and continuous casting and other rolling facilities. Pohang Works also has docking facilities capable of accommodating large ships for unloading raw materials, storage areas for raw materials and separate docking facilities for ships carrying products for export. Pohang Works is equipped with a highly advanced computerized production-management system allowing constant monitoring and control of the production process.
Gwangyang Works
Construction of Gwangyang Works began in 1985 and ended in 1992. Gwangyang Works specializes in high-volume production of a limited number of steel products. Products manufactured at Gwangyang Works include both hot and cold rolled types.
Situated on a site of 13.7 million square meters reclaimed from the sea in Gwangyang in the southwestern region of Korea, Gwangyang Works is comprised of iron-making plants, steelmaking plants, continuous casting plants, hot strip mills and thin-slab hot rolling plants. The site also features docking and unloading facilities for raw materials capable of accommodating large ships for unloading raw materials, storage areas for raw materials and separate docking facilities for ships carrying products for export.
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We believe Gwangyang Works is one of the most technologically-advanced integrated steel facilities in the world. Gwangyang Works has a completely automated, linear production system that enables the whole production process, from iron-making to finished products, to take place without interruption. Like Pohang Works, Gwangyang Works is equipped with a highly advanced computerized production-management system allowing constant monitoring and control of the production process.
Capacity Utilization Rates
The following table sets out the aggregate capacity utilization rates of Pohang Works and Gwangyang Works for the periods indicated.
As of or for the Year Ended December 31,
2023
2024
2025
Crude steel production capacity for the year (million tons per year)
Actual crude steel output (million tons)
Capacity utilization rate (%) (1)
Calculated by dividing actual crude steel output by the actual crude steel production capacity for the relevant period as determined by us.
Steel Production Facilities Abroad
PT. KRAKATAU POSCO
The following table sets out PT. KRAKATAU POSCO’s capacity utilization rates for the periods indicated.
POSCO (Zhangjiagang)
The following table sets out POSCO (Zhangjiagang)’s capacity utilization rates for the periods indicated.
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POSCO YAMATO VINA
The following table sets out POSCO YAMATO VINA’s capacity utilization rates for the periods indicated.
Item 4A. Unresolved Staff Comments
We do not have any unresolved comments from the Securities and Exchange Commission staff regarding our periodic reports under the Exchange Act of 1934.
Item 5. Operating and Financial Review and Prospects
Item 5.A. Operating Results
The following discussion and analysis is based on our Consolidated Financial Statements, which have been prepared in accordance with IFRS as issued by the IASB. Unless otherwise noted, the amounts included in Item 5.A. are presented on a consolidated basis.
Construction Segment. The Construction Segment of our Infrastructure Business consists primarily of POSCO E&C’s planning, designing and construction of industrial plants, civil engineering projects and commercial and residential buildings, both in Korea and overseas.
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Factors Affecting Our Results of Operations and Financial Condition
One of the major factors contributing to our historical performance has been the growth of the Korean economy, and our future performance will depend at least in part on Korea’s general economic growth and prospects. For a description of recent developments that have had and may continue to have an adverse effect on our results of operations and financial condition, see “Item 3. Key Information — Item 3.D. Risk Factors — Korea and the rest of Asia are our most important markets, and our current business and future growth could be materially and adversely affected if economic conditions in the region deteriorate.” A number of other factors have had or are expected to have a material impact on our results of operations, financial condition and capital expenditures. These factors include:
our sales volume, unit prices and product mix for steel products;
costs and production efficiency; and
exchange rate fluctuations.
As a result of these factors, our financial results in the past may not be indicative of future results or trends in those results.
Sales Volume, Unit Prices and Product Mix for Steel Products
In recent years, our net sales have been affected by the following factors relating to our steel business:
the demand for our products in the Korean market and our capacity to meet that demand;
our ability to compete for sales in the export market, including due to tariffs imposed on our export products;
price levels; and
our ability to improve our product mix.
Domestic demand for our products is affected by the condition of major steel-consuming industries, such as construction, shipbuilding, automotive, electrical appliances and downstream steel processors, and the Korean economy in general.
In 2024, the unit sales price in Won for each of our principal product lines of steel products decreased compared to 2023 primarily due to continued weakness in global economic conditions. The weighted average unit price for our principal product lines of steel products decreased by 4.3% from
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2023 to 2024, the impact of which was offset in part by the depreciation in the average value of the Won against the U.S. dollar in 2024 compared to 2023 that increased our export prices in Won terms. The Market Average Exchange Rate depreciated from an average of Won 1,305.4 to US$1.00 in 2023 to an average of Won 1,364.0 to US$1.00 in 2024.
The unit sales price of plates, which accounted for 16.1% of total sales volume of our principal steel products, decreased by 9.8% in 2024 compared to 2023. The unit sales price of silicon steel sheets, which accounted for 2.1% of total sales volume of such products, decreased by 8.9% in 2024 compared to 2023. The unit sales price of stainless steel products, which accounted for 8.6% of total sales volume of such products, decreased by 6.5% in 2024 compared to 2023. The unit sales price of hot rolled products, which accounted for 32.5% of total sales volume of such products, decreased by 3.8% in 2024 compared to 2023. The unit sales price of cold rolled products, which accounted for 35.4% of total sales volume of such products, decreased by 3.1% in 2024 compared to 2023. The unit sales price of wire rods, which accounted for 5.2% of total sales volume of such products, decreased by 1.2% in 2024 compared to 2023.
In 2025, the unit sales price in Won for each of our principal product lines of steel products decreased compared to 2024 primarily due to continued weakness in global economic conditions. The weighted average unit price for our principal product lines of steel products decreased by 4.8% from 2024 to 2025, the impact of which was offset in part by the depreciation in the average value of the Won against the U.S. dollar in 2025 compared to 2024 that increased our export prices in Won terms. The Market Average Exchange Rate depreciated from an average of Won 1,364.0 to US$1.00 in 2024 to an average of Won 1,422.2 to US$1.00 in 2025.
The unit sales price of hot rolled products, which accounted for 33.1% of total sales volume of such products, decreased by 8.1% in 2025 compared to 2024. The unit sales price of silicon steel sheets, which accounted for 2.2% of total sales volume of such products, decreased by 4.6% in 2025 compared to 2024. The unit sales price of cold rolled products, which accounted for 36.4% of total sales volume of such products, decreased by 4.1% in 2025 compared to 2024. The unit sales price of plates, which accounted for 15.6% of total sales volume of our principal steel products, decreased by 3.2% in 2025 compared to 2024. The unit sales price of stainless steel products, which accounted for 8.2% of total sales volume of such products, decreased by 1.0% in 2025 compared to 2024. The unit sales price of wire rods, which accounted for 4.5% of total sales volume of such products, decreased by 0.6% in 2025 compared to 2024.
The table below sets out the average unit sales prices for our semi-finished and finished steel products produced by us and directly sold to external customers for the periods indicated.
Average (1)
“Average” prices are based on the weighted average, by sales volume, of our sales for the listed principal products produced by us and directly sold to external customers. See “Item 4. Information on the Company — Item 4.B. Business Overview — Steel Segment — Major Products.” The average unit sales price calculation does not include sales results of steel products categorized as “others.”
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Costs and Production Efficiency
Our major costs and operating expenses are raw material purchases, depreciation, labor and other purchases. The table below sets out our cost of sales and selling and administrative expenses as a percentage of our revenue as well as gross profit margin and operating profit margin for the periods indicated.
Cost of sales
Selling and administrative expenses
Gross profit margin (1)
Operating profit margin (2)
Ratio of gross profit to revenue.
Ratio of operating profit to revenue.
We are closely monitoring changes in market conditions and we implemented the following measures in recent years to improve our profit margins:
pursuing cost reduction through enhancing product designs, improving productivity and reducing fixed costs;
focusing on marketing activities to increase the sales of higher margin, higher value-added products and to strengthen our domestic market position;
pursuing synergies among member companies of the POSCO Group through corporate restructurings; and
establishing a special sales committee to more effectively respond to changes in market trends and preparing responses to various scenarios of future sales.
Production capacity represents our maximum production capacity that can be achieved with an optimal level of operations of our facilities. The table below sets out certain information regarding our production capacity and efficiency in the production of steel products for the periods indicated.
Crude steel production capacity (million tons per year)
Capacity utilization rate (%)
Exchange Rate Fluctuations
Our consolidated financial statements are prepared from our local currency denominated financial results, assets and liabilities and our subsidiaries around the world, which are then translated
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into Won. A substantial proportion of our consolidated financial results is accounted for in currencies other than the Won. Accordingly, our consolidated financial results and assets and liabilities may be materially affected by changes in the exchange rates of foreign currencies. In 2025, 61.7% of the Steel Segment’s total revenue was in overseas markets outside of Korea. To the extent that we incur costs in one currency and make sales in another, our profit margins may be affected by changes in the exchange rates between the two currencies. Since the currency in which sales are recognized may not be the same as the currency in which expenses are incurred, foreign exchange rate fluctuations may materially affect our results of operations. Depreciation of the Won may materially affect the results of our operations because, among other things, it causes:
a reduction in net sales and trade accounts and notes receivables in Won from export sales, which are primarily denominated in U.S. dollars and to a lesser extent in Yen and Yuan.
The overall net impact from fluctuations of the Won against major currencies is difficult to estimate and varies from year to year. We strive to naturally offset our foreign exchange risk by matching foreign currency receivables with our foreign currency payables and our overseas subsidiaries have sought to further mitigate the adverse impact of exchange rate fluctuations by conducting business transactions in the local currency of the respective market in which the transactions occur. In particular, POSCO INTERNATIONAL’s exposure to fluctuations in exchange rates, including the Won/U.S. dollar exchange rate, is limited because trading transactions typically involve matched purchase and sale contracts, which result in limited settlement exposure, and because POSCO INTERNATIONAL’s contracts with domestic suppliers of products for export and with domestic purchasers of imported products are generally denominated in U.S. dollars. Although the impact of exchange rate fluctuations is partially mitigated by such strategies, we and our subsidiaries, particularly POSCO INTERNATIONAL and POSCO E&C, also periodically enter into derivative contracts, primarily foreign currency swaps and forward exchange contracts, to further hedge some of our foreign exchange risks. However, our results of operations have historically been affected by exchange rate fluctuations and there can be no assurance that such strategies will be sufficient to reduce or eliminate the adverse impact of such fluctuations in the future.
Recent Accounting Changes
For a discussion of new standards, interpretations and amendments to existing standards that have been published, see Note 2 to the Consolidated Financial Statements.
Explanatory Note Regarding Presentation of Certain Financial Information under K-IFRS
In addition to preparing consolidated financial statements in accordance with IFRS as issued by the IASB included in this Annual Report on Form 20-F, we also prepare consolidated financial statements in accordance with K-IFRS as adopted by the Korea Accounting Standards Board, which we are required to file with the Financial Services Commission and the Korea Exchange under the FSCMA.
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K-IFRS differs in certain respects from IFRS as issued by the IASB in the presentation of operating profit. In addition, under K-IFRS, revenue from the development and sale of real estate is recognized using the percentage of completion method. However, under IFRS as issued by the IASB, revenue from the development and sale of certain real estate is recognized when an individual unit of residential real estate is delivered to the buyer. As a result, our consolidated statements of comprehensive income and our consolidated statements of financial position prepared in accordance with IFRS as issued by the IASB included in this Annual Report on Form 20-F differ from our consolidated statements of comprehensive income and consolidated statements of financial position prepared in accordance with K-IFRS.
The table below sets forth a reconciliation of our operating profit and profit as presented in our consolidated statements of comprehensive income prepared in accordance with IFRS as issued by the IASB for each of the years ended December 31, 2023, 2024 and 2025 to our operating profit and profit in our consolidated statements of comprehensive income prepared in accordance with K-IFRS, for each of the corresponding years, taking into account such differences:
Operating profit under IFRS as issued by the IASB
Additions:
Other bad debt expenses
Loss on disposals of assets held for sale
Loss on disposals of investments in subsidiaries, associates and joint ventures
Loss on disposals of property, plant and equipment
Impairment loss on property, plant and equipment
Impairment loss on intangible assets
Loss on valuation of firm commitment
Idle tangible asset expenses
Increase to provisions
Donations
Miscellaneous expenses and others
Deductions:
Recovery of allowance for other bad debt expenses
Gain on disposals of assets held for sale
Gain on disposals of investment in subsidiaries, associates and joint ventures
Gain on disposals of property, plant and equipment
Gain on valuation of firm commitment
Reversal of other provisions
Gain on insurance claim
Gain on bargain purchases
Gain on disposal of emission rights
Miscellaneous income and others
Revenue recognition related to development and sale of real estate
Cost of sales recognition related to development and sale of real estate
Operating profit under K-IFRS
Profit under IFRS as issued by the IASB
Adjustments related to development and sale of real estate:
Revenue
Others (1)
Income tax expense
Profit under K-IFRS
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Following a notification of a final administrative penalty in March 2026 in relation to the STS No. 4 steelmaking plant incident, we adjusted previously recognized provisions and related accounts accordingly.
Operating Results – 2024 Compared to 2025
The following table presents our consolidated statement of comprehensive income information and changes therein for 2024 and 2025.
Gross profit
Selling and administrative expenses:
Other administrative expenses
Selling expenses
Other operating income and expenses:
Other operating income
Other operating expenses
Operating profit
Share of profit (loss) of equity-accounted investees, net
Finance income
Finance costs
Profit before income taxes
Profit
Profit attributable to owners of the controlling company
Profit attributable to non-controlling interests
N.A. means not applicable.
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The following table presents our revenue by segment and changes therein for 2024 and 2025.
Steel Segment:
External revenue
Internal revenue
Infrastructure Business — Trading Segment
Infrastructure Business — Construction Segment
Infrastructure Business — Logistics and Others Segment
Others Segment:
Basis difference adjustments (1)
Basis difference adjustments are related to the difference in recognizing revenue and expenses of the Construction Segment of the Infrastructure Business in connection with the development and sales of certain residential real estate between the report reviewed by the chief executive officer and the consolidated financial statements. See Notes 3 and 40 to the Consolidated Financial Statements.
Our revenue decreased by 6.1%, or Won 4,472 billion, from Won 73,459 billion in 2024 to Won 68,987 billion in 2025 due to decreases in external revenues of most of our segments, particularly external revenues of the Steel Segment, the Construction Segment of the Infrastructure Business and the Rechargeable Battery Materials Segment, the impact of which was offset in small part by an increase in external revenue of the Trading Segment of the Infrastructure Business. Specifically:
Steel Segment. External revenue from the Steel Segment, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, decreased by 4.7%, or Won 1,819 billion, from Won 39,104 billion in 2024 to Won 37,285 billion in 2025 due to decreases in the average unit sales price per ton of our principal steel products and the sales volume of our principal steel products. The weighted average unit sales price per ton of the principal steel products
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produced by us and directly sold to external customers decreased by 4.8% from Won 1,217,705 per ton in 2024 to Won 1,159,315 per ton in 2025 primarily due to continued weakness in global economic conditions, which impact was offset in part by depreciation of the Won against the U.S. dollar in 2025 that increased our export prices in Won terms during 2025. The overall sales volume of our principal steel products decreased by 0.7%, from 29.2 million tons in 2024 to 28.9 million tons in 2025. Such factors were principally attributable to the following:
The unit sales price in Won of each of our principal product lines decreased from 2024 to 2025. The unit sales prices in Won of hot rolled products, silicon steel sheets, cold rolled products, plates, stainless steel products and wire rods decreased by 8.1%, 4.6%, 4.1%, 3.2%, 1.0% and 0.6%, respectively, from 2024 to 2025. For a discussion of changes in the unit sales prices of each of our principal product lines, see “— Overview — Sales Volume, Unit Prices and Product Mix” above.
The sales volume of wire rods, stainless steel products and plates decreased by 14.2%, 5.7% and 3.7%, respectively, from 2024 to 2025. On the other hand, the sales volume of silicon steel sheets, cold rolled products and hot rolled products increased by 2.2%, 1.9% and 1.2%, respectively, from 2024 to 2025. For a discussion of changes in the sales volume of each of our principal product lines, see “Item 4.B. Business Overview — Steel Segment — Major Products.”
Total revenue from the Steel Segment, which includes internal revenue from inter-company transactions, decreased by 4.5%, or Won 2,802 billion, from Won 62,201 billion in 2024 to Won 59,399 billion in 2025 as internal revenue from inter-company transactions decreased by 4.3%, or Won 983 billion, from Won 23,097 billion in 2024 to Won 22,114 billion in 2025 primarily due to a decrease in the sale prices of steel products sold through trading subsidiaries.
Trading Segment of the Infrastructure Business. External revenue from the Trading Segment of the Infrastructure Business, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, increased by 4.1%, or Won 940 billion, from Won 22,804 billion in 2024 to Won 23,744 billion in 2025 primarily due to increases in sales volume of steel products traded by POSCO INTERNATIONAL and the trading volume of non-steel products traded by POSCO INTERNATIONAL as well as the depreciation of the Won against the U.S. dollar in 2025 that increased our export prices in Won terms during 2025, the aggregate impact of which was offset in part by decreases in the prices of steel products traded by POSCO INTERNATIONAL.
Total revenue from the Trading Segment of the Infrastructure Business, which includes internal revenue from inter-company transactions, decreased by 1.6%, or Won 682 billion, from Won 42,903 billion in 2024 to Won 42,221 billion in 2025 as internal revenue from inter-company transactions decreased by 8.1%, or Won 1,622 billion, from Won 20,099 billion in 2024 to Won 18,477 billion in 2025 primarily due to decreases in the volume of steel products traded as inter-company transactions.
Construction Segment of the Infrastructure Business. External revenue from the Construction Segment of the Infrastructure Business, which does not include internal revenue from inter-company transactions that are eliminated during consolidation and basis difference adjustments, decreased by 24.9%, or Won 1,858 billion, from Won 7,473 billion in 2024 to Won 5,615 billion in 2025 primarily due to decreases in external revenues from plant construction projects and infrastructure projects.
Total revenue from the Construction Segment of the Infrastructure Business, which includes internal revenue from inter-company transactions, decreased by 26.5%, or Won 2,602 billion, from Won 9,830 billion in 2024 to Won 7,228 billion in 2025 as internal revenue from inter-company transactions decreased by 31.6%, or Won 744 billion, from Won 2,357 billion in 2024 to Won 1,613 billion in 2025 primarily due to decreases in the construction activities for member companies of the POSCO Group from 2024 to 2025.
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Logistics and Others Segment of the Infrastructure Business. External revenue from the Logistics and Others Segment of the Infrastructure Business, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, decreased by 26.8%, or Won 113 billion, from Won 422 billion in 2024 to Won 309 billion in 2025, primarily due to a decrease in revenue from automation of logistical operation services provided by POSCO DX to its external customers following general slowdowns in economic activity.
Total revenue from the Logistics and Others Segment of the Infrastructure Business, which includes internal revenue from inter-company transactions, decreased by 14.1%, or Won 585 billion, from Won 4,139 billion in 2024 to Won 3,554 billion in 2025 as internal revenue from inter-company transactions decreased by 12.7%, or Won 471 billion, from Won 3,717 billion in 2024 to Won 3,246 billion in 2025 primarily due to a decrease in logistics services following reduced capital expenditures from members companies of the POSCO group.
Rechargeable Battery Materials Segment. External revenue from the Rechargeable Battery Materials Segment, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, decreased by 25.5%, or Won 717 billion, from Won 2,813 billion in 2024 to Won 2,096 billion in 2025, primarily due to a decrease in sales of cathode and anode materials used, among others, in the production of electric batteries following a decrease in demand for electric vehicles.
Total revenue from the Rechargeable Battery Materials Segment, which includes internal revenue from inter-company transactions, decreased by 12.8%, or Won 492 billion, from Won 3,830 billion in 2024 to Won 3,338 billion in 2025 while internal revenue from inter-company transactions increased by 22.1%, or Won 225 billion, from Won 1,017 billion in 2024 to Won 1,242 billion in 2025 primarily due to increased internal sales from member companies within the Rechargeable Battery Materials Segment to POSCO Future M.
Others Segment. External revenue from the Others Segment, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, decreased by 37.7%, or Won 28 billion, from Won 73 billion in 2024 to Won 45 billion in 2025, primarily due to a decrease in dividend income following disposals of certain of our investments.
Total revenue from the Others Segment, which includes internal revenue from inter-company transactions, decreased by 28.9%, or Won 611 billion, from Won 2,111 billion in 2024 to Won 1,500 billion in 2025 as internal revenue from inter-company transactions decreased by 28.6%, or Won 583 billion, from Won 2,038 billion in 2024 to Won 1,455 billion in 2025 primarily due to a decrease in dividend payments from our subsidiaries.
Cost of Sales
Our cost of sales decreased by 6.1%, or Won 4,121 billion, from Won 67,971 billion in 2024 to Won 63,850 billion in 2025 primarily due to decreases in the average prices in Won terms of some of our key raw materials for POSCO and a decrease in production volume of finished steel products sold by us, the impact of which was partially offset by depreciation of the Won against the U.S. dollar, which increased the price of our imported raw materials in Won terms. With respect to the principal raw materials for our steel products, the average market price of coal per wet metric ton (Premium Low Vol Coking Coal, FOB Australia Index announced by Platts) decreased from US$240 in 2024 to US$188 in 2025. In addition, the average market price of iron ore per dry metric ton (Iron Ore 62% Fe, CFR China Index announced by Platts) decreased from US$109 in 2024 to US$102 in 2025.
Gross Profit
Our gross profit decreased by 6.4%, or Won 351 billion, from Won 5,488 billion in 2024 to Won 5,137 billion in 2025 primarily due to (i) a decrease in dividend income and fund investment returns of
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the Others segment and (ii) a decrease in POSCO E&C’s participation in higher margin plant and infrastructure construction projects in 2025, which impact was partially offset by (iii) an increase in gross profit from POSCO reflecting cost reductions that outpaced the decrease in revenue. Our gross profit margin, which is gross profit as a percentage of revenue, decreased from 7.5% in 2024 to 7.4% in 2025.
Selling and Administrative Expenses
The following table presents a breakdown of our selling and administrative expenses and changes therein for 2024 and 2025.
Freight and custody expenses
Sales commissions
Sales promotion
Sales insurance premium
Contract cost
Total selling expenses
Wages and salaries
Expenses related to post-employment benefits
Other employee benefits
Travel
Depreciation
Amortization
Taxes and public dues
Rental
Advertising
Research and development
Service fees
Bad debt expenses (reversal)
Total other administrative expenses
Total selling and administrative expenses
Our selling and administrative expenses increased by 3.1%, or Won 100 billion, from Won 3,239 billion in 2024 to Won 3,339 billion in 2025 primarily due to increases in wages and salaries and bad debt expenses, the impact of which was partially offset by decreases in expenses related to post-employment benefits and service fees. Such factors were principally attributable to the following:
Our wages and salaries increased by 9.2%, or Won 112 billion, from Won 1,212 billion in 2024 to Won 1,324 billion in 2025 primarily due to increased statutory severance payments at POSCO (Zhangjiagang).
Our bad debt expenses increased by 25.9%, or Won 35 billion, from Won 134 billion in 2024 to Won 169 billion in 2024 primarily due to an increase in non-performing receivables at POSCO E&C.
Our expenses related to post-employment benefits decreased by 26.1%, or Won 35 billion, from Won 136 billion in 2024 to Won 101 billion in 2025 primarily due to decreases in retirement benefit expenses following workforce reductions at POSCO MOBILITY SOLUTION in 2024.
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Our service fees decreased by 12.8%, or Won 35 billion, from Won 269 billion in 2024 to Won 234 billion in 2025 primarily due to a decrease in service-related activities of POSCO INTERNATIONAL.
Other Operating Income and Expenses
The following table presents a breakdown of our other operating income and changes therein for 2024 and 2025.
Gain on disposals of investments in subsidiaries,associates and joint ventures
Miscellaneous income
Total other operating income
Our other operating income decreased by 21.1%, or Won 81 billion, from Won 387 billion in 2024 to Won 306 billion in 2025 primarily due to a decrease in gain on insurance claim, the impact of which was partially offset by increases in gain on disposals of assets held for sale and gain on disposals of investments in subsidiaries, associates and joint ventures. Such factors were principally attributable to the following:
Our gain on insurance claim decreased by 87.6%, or Won 138 billion, from Won 158 billion in 2024 to Won 20 billion in 2025 primarily due to significant insurance payments received in 2024 in relation to the flooding caused by Typhoon Hinnamnor at Pohang Works’ facilities in September 2022 compared to no such payments in 2025.
Our gain on disposals of assets held for sale increased significantly by 1,108.4%, or Won 49 billion, from Won 5 billion in 2024 to Won 54 billion in 2025 primarily due to gains on disposals related to the sale of POSCO Future M’s interest in P&O Chemical Co., Ltd in 2025.
Our gain on disposals of investments in subsidiaries, associates and joint ventures increased by 232.8%, or Won 33 billion, from Won 14 billion in 2024 to Won 47 billion in 2025 primarily due to gain on disposals of investment in POSCO (Suzhou) Steel Processing Center CO., LTD. in 2025.
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The following table presents a breakdown of our other operating expenses and changes therein for 2024 and 2025.
Miscellaneous expenses
Total other operating expenses
Our other operating expenses decreased by 47.1%, or Won 557 billion, from Won 1,184 billion in 2024 to Won 627 billion in 2025 primarily due to decreases in impairment loss on property, plant and equipment and loss on disposals of investments in subsidiaries, associates and joint ventures, the impact of which was partially offset by an increase in miscellaneous expenses. Such factors were principally attributable to the following:
Our impairment loss on property, plant and equipment decreased by 77.7%, or Won 472 billion, from Won 608 billion in 2024 to Won 136 billion in 2025. In 2024, such impairment loss primarily related to impairment losses on certain anode and cathode materials facilities that were in long-term idle status or that did not meet anticipated economic performance. In 2025, such impairment loss primarily related to suspensions of operations in certain of our facilities, such as Finex Plant no. 3.
Our loss on disposals of investments in subsidiaries, associate and joint ventures decreased by 82.5%, or Won 60 billion, from Won 73 billion in 2024 to Won 13 billion in 2025 primarily due to the disposal of POSCO International Power (PNG Lae) Ltd. in 2024.
Our miscellaneous expenses increased by 76.4%, or Won 36 billion, from Won 46 billion in 2024 to Won 82 billion in 2025 primarily due to administrative fines imposed on POSCO relating to facilities management and litigation-related costs incurred by POSCO INTERNATIONAL in connection with Peru Block 8.
Operating Profit
Due to the factors described above, our operating profit increased by 1.8%, or Won 25 billion, from Won 1,452 billion in 2024 to Won 1,477 billion in 2025. Our operating profit margin, which is operating profit as a percentage of revenue, increased from 2.0% in 2024 to 2.1% in 2025.
Share of Profit (Loss) of Equity-Accounted Investees
We recorded share of loss of equity-accounted investees (net) of Won 256 billion in 2024 and share of profit of equity-accounted investees (net) of Won 350 billion in 2025.
In 2024, we recognized a net loss from our proportionate share of equity-accounted investees of Won 256 billion primarily due to our share of losses of Won 266 billion from NCR LLC, Won 117 billion
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from Zhejiang Huayou-POSCO ESM Co., Ltd., Won 62 billion from SNNC and Won 49 billion from HBIS-POSCO Automotive Steel Co., Ltd., the aggregate impact of which was partially offset by our share of profit of Won 203 billion from Roy Hill Holdings Pty Ltd. See Note 11 to the Consolidated Financial Statements.
In 2025, we recognized a net profit from our proportionate share of equity-accounted investees of Won 350 billion primarily due to our share of profits of Won 161 billion from Roy Hill Holdings Pty Ltd., Won 95 billion from AMCI (WA) PTY LTD., Won 57 billion from South-East Asia Gas Pipeline Company Ltd. and Won 43 billion from POSCO-NPS Niobium LLC, the aggregate impact of which was partially offset by our share of loss of Won 48 billion from HBIS-POSCO Automotive Steel Co., Ltd.. See Note 11 to the Consolidated Financial Statements.
Finance Income and Finance Costs
The following table presents a breakdown of our finance income and costs and changes therein for 2024 and 2025.
Interest income
Dividend income
Gain on foreign currency transactions
Gain on foreign currency translations
Gain on derivatives transactions
Gain on valuations of derivatives
Gain on disposals of financial assets at fair value through profit or loss
Gain on valuations of financial assets at fair value through profit or loss
Gain on valuations of financial liabilities at fair value through profit or loss
Total finance income
Interest expenses
Loss on foreign currency transactions
Loss on foreign currency translations
Loss on derivatives transactions
Loss on valuations of derivatives
Loss on disposal of trade accounts and notes receivable
Loss on disposals of financial assets at fair value through profit or loss
Loss on valuations of financial assets at fair value through profit or loss
Loss on valuations of financial liabilities at fair value through profit or loss
Total finance costs
We recognized net loss on foreign currency translations of Won 713 billion in 2024 compared to net gain on foreign currency translations of Won 15 billion in 2025, as the Won depreciated against the U.S. dollar at year-end in 2024 but appreciated at year-end in 2025. In terms of the Market Average Exchange Rate, the Won depreciated against the U.S. dollar from Won 1,289.4 to US$1.00 as of December 31, 2023 to Won 1,470.0 to US$1.00 as of December 31, 2024, but appreciated to Won 1,434.9 to US$1.00 as of December 31, 2025. In addition, our net loss on foreign currency transactions decreased by 49.4%, or Won 14 billion, from Won 28 billion in 2024 to Won 14 billion, as
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the average value of the Won against the U.S. dollar depreciated in 2024 and further depreciated (to a greater extent) in 2025. The Market Average Exchange Rate, which was Won 1,305.4 to US$1.00 as of December 31, 2023, depreciated during 2024 to an average of Won 1,364.0 to US$1.00 in 2024 and further depreciated during 2025 to an average of Won 1,422.2 to US$1.00 in 2024. Against such fluctuations, our net gain on valuations of derivatives decreased by 89.9%, or Won 710 billion, from Won 790 billion in 2024 to Won 80 billion in 2025, and we recognized net gain on derivatives transactions of Won 120 billion in 2024 compared to net loss on derivatives transactions of Won 137 billion in 2025.
We recognized net gain on valuations of financial assets at fair value through profit or loss of Won 121 billion in 2024 compared to net loss on valuations of financial assets at fair value through profit or loss of Won 57 billion in 2025. In 2024, we recognized such net gain primarily due to primarily due to the yields on our financial products exceeding market interest rates. In 2025, we recognized such net loss primarily due to the general decrease in interest rates in Korea in 2025.
We recognized net gain on valuations of financial liabilities at fair value through profit or loss of Won 239 billion in 2024 compared to net loss on valuations of financial liabilities at fair value through profit or loss of Won 1 billion in 2025. In 2024, we recognized a net gain as the market price of our shares into which exchangeable bonds we had issued decreased, which in turn resulted in a gain on valuation of financial liabilities. The net gain also included the effect of the early redemption of the exchangeable bonds. In 2025, we did not recognize a material gain on loss on valuation of financial liabilities at fair value through profit or loss as a result of the early redemption of exchangeable bonds in 2024.
Our interest income decreased by 7.5%, or Won 44 billion, from Won 577 billion in 2024 to Won 533 billion in 2025 primarily due to a general decrease in interest rates in Korea, which impact was partially offset by an increase in our average balance of interest-earning financial assets.
Our interest expenses increased by 3.8%, or Won 39 billion, from Won 1,052 billion in 2024 to Won 1,091 billion in 2025 primarily due to an increase in our average balance of interest-bearing liabilities.
Profit before Income Taxes
Due to the factors described above, our profit before income taxes decreased by 14.1%, or Won 187 billion, from Won 1,326 billion in 2024 to Won 1,139 billion in 2025.
The following table presents our profit and loss by segment, prior to adjusting for goodwill and corporate fair value adjustments, elimination of inter-segment losses (profits), income tax expense and basis difference, and changes therein for 2024 and 2025.
Goodwill and corporate fair value adjustments
Elimination of inter-segment profit
Income tax expense(1)
Basis difference adjustments(2)
Income tax expense presented herein reflects amounts determined under K-IFRS for purposes of segment profit measurement and may differ from income tax expense presented in the consolidated financial statements under IFRS.
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Basis difference adjustments are related to the difference in recognizing revenue and expenses, including income tax expense, of the Construction Segment of the Infrastructure Business in connection with the development and sales of certain residential real estate and other items between the report reviewed by the chief executive officer and the consolidated financial statements. See Notes 3 and 40 to the Consolidated Financial Statements.
Income Tax Expense
Our income tax expense increased by 90.7%, or Won 291 billion, from Won 321 billion in 2024 to Won 612 billion in 2025, primarily due to a significant increase in the effect of tax rate changes resulting from the amendment to Article 55 of the Korean Corporate Tax Act, which revised the corporate tax rate brackets and applicable rates. Our effective tax rate increased from 24.20% in 2024 to 53.74% in 2025. See Note 35 to the Consolidated Financial Statements.
Due to the factors described above, our profit decreased by 47.6%, or Won 478 billion, from Won 1,005 billion in 2024 to Won 527 billion in 2025. Our profit margin, which is profit as a percentage of revenue, decreased from 1.4% in 2024 to 0.8% in 2025.
Operating Results – 2023 Compared to 2024
The following table presents our consolidated statement of comprehensive income information and changes therein for 2023 and 2024.
Other administrative expenses(1)
Other operating income(2)
Other operating expenses(3)
In 2023, includes reversal of impairment loss on trade accounts and notes receivable of Won 18 billion.
In 2023, includes recovery of allowance for other bad debt expenses of Won 8 billion.
In 2023, includes other bad debt expenses of Won 291 billion (including impairment loss on other receivables of Won 284 billion).
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The following table presents our revenue by segment and changes therein for 2023 and 2024.
Basis difference adjustments(1)
Our revenue decreased by 4.7%, or Won 3,597 billion, from Won 77,057 billion in 2023 to Won 73,459 billion in 2024 due to decreases in external revenues of each of our segments, particularly external revenues of the Steel Segment, the Trading Segment of the Infrastructure Business, the Rechargeable Battery Materials Segment and the Construction Segment of the Infrastructure Business. Specifically:
Steel Segment. External revenue from the Steel Segment, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, decreased by 3.2%, or Won 1,289 billion, from Won 40,393 billion in 2023 to Won 39,104 billion in 2024 due to a decrease in the average unit sales price per ton of our principal steel products, which was offset in part by an increase in the sales volume of our principal steel products. The weighted average unit sales price per
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ton of the principal steel products produced by us and directly sold to external customers decreased by 4.3% from Won 1,272,754 per ton in 2023 to Won 1,217,705 per ton in 2024 primarily due to continued weakness in global economic conditions, which impact was offset in part by depreciation of the Won against the U.S. dollar in 2024 that increased our export prices in Won terms during 2024. On the other hand, the overall sales volume of our principal steel products increased by 1.1%, from 28.8 million tons in 2023 to 29.2 million tons in 2024. Such factors were principally attributable to the following:
The unit sales price in Won of each of our principal product lines decreased from 2023 to 2024. The unit sales prices in Won of plates, silicon steel sheets, stainless steel products, hot rolled products, cold rolled products and wire rods decreased by 9.8%, 8.9%, 6.5%, 3.8%, 3.1% and 1.2%, respectively, from 2023 to 2024. For a discussion of changes in the unit sales prices of each of our principal product lines, see “— Overview — Sales Volume, Unit Prices and Product Mix” above.
The sales volume of silicon steel sheets, cold rolled products, stainless steel products and plates increased by 19.6%, 5.7%, 2.0% and 0.6%, respectively, from 2023 to 2024. On the other hand, the sales volume of wire rods and hot rolled products decreased by 5.9% and 3.2%, respectively, from 2023 to 2024. For a discussion of changes in the sales volume of each of our principal product lines, see “Item 4.B. Business Overview — Steel Segment — Major Products.”
Total revenue from the Steel Segment, which includes internal revenue from inter-company transactions, decreased by 2.1%, or Won 1,338 billion, from Won 63,539 billion in 2023 to Won 62,201 billion in 2024 as internal revenue from inter-company transactions decreased by 0.2%, or Won 49 billion, from Won 23,145 billion in 2023 to Won 23,097 billion in 2024 primarily due to a decrease in the sale prices of steel products sold through trading subsidiaries.
Trading Segment of the Infrastructure Business. External revenue from the Trading Segment of the Infrastructure Business, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, decreased by 5.1%, or Won 1,230 billion, from Won 24,034 billion in 2023 to Won 22,804 billion in 2024 primarily due to decreases in the prices of steel products traded by POSCO INTERNATIONAL and the trading volume of non-steel products traded by POSCO INTERNATIONAL reflecting deterioration in global economic conditions, the aggregate impact of which was offset in part by (i) depreciation of the Won against the U.S. dollar in 2024 that increased our export prices in Won terms during 2024 and (ii) increase in the sales volume of steel products traded by POSCO INTERNATIONAL.
Total revenue from the Trading Segment of the Infrastructure Business, which includes internal revenue from inter-company transactions, decreased by 0.1%, or Won 40 billion, from Won 42,944 billion in 2023 to Won 42,903 billion in 2024 as internal revenue from inter-company transactions increased by 6.3%, or Won 1,189 billion, from Won 18,910 billion in 2023 to Won 20,099 billion in 2024 primarily due to increases in the volume of steel products traded as inter-company transactions.
Construction Segment of the Infrastructure Business. External revenue from the Construction Segment of the Infrastructure Business, which does not include internal revenue from inter-company transactions that are eliminated during consolidation and basis difference adjustments, decreased by 10.0%, or Won 828 billion, from Won 8,301 billion in 2023 to Won 7,473 billion in 2024 primarily due to decreases in external revenues from plant construction projects and infrastructure projects.
Total revenue from the Construction Segment of the Infrastructure Business, which includes internal revenue from inter-company transactions, decreased by 4.3%, or Won 438 billion, from Won 10,268 billion in 2023 to Won 9,830 billion in 2024 as internal revenue from inter-company transactions
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increased by 19.8%, or Won 390 billion, from Won 1,966 billion in 2023 to Won 2,357 billion in 2024 primarily due to an increase in the construction activities for member companies of the POSCO Group from 2023 to 2024.
Logistics and Others Segment of the Infrastructure Business. External revenue from the Logistics and Others Segment of the Infrastructure Business, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, decreased by 10.4%, or Won 49 billion, from Won 471 billion in 2023 to Won 422 billion in 2024, primarily due to a decrease in revenue from automation of logistical operation services provided by POSCO DX to its external customers following general slowdowns in economic activity.
Total revenue from the Logistics and Others Segment of the Infrastructure Business, which includes internal revenue from inter-company transactions, increased by 4.9%, or Won 193 billion, from Won 3,946 billion in 2023 to Won 4,139 billion in 2024 as internal revenue from inter-company transactions increased by 7.0%, or Won 242 billion, from Won 3,475 billion in 2023 to Won 3,717 billion in 2024 primarily due to an increase in inter-company transactions as a result of the integration of the rechargeable battery related logistics activities.
Rechargeable Battery Materials Segment. External revenue from the Rechargeable Battery Materials Segment, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, decreased by 26.3%, or Won 1,003 billion, from Won 3,816 billion in 2023 to Won 2,813 billion in 2024, primarily due to a decrease in sales of cathode and anode materials used, among others, in the production of electric batteries. Global demand for electric vehicles has decreased in recent years, which in turn decreased demand for cathode and anode materials from our key customers in 2024 compared to 2023.
Total revenue from the Rechargeable Battery Materials Segment, which includes internal revenue from inter-company transactions, decreased by 20.6%, or Won 992 billion, from Won 4,822 billion in 2023 to Won 3,830 billion in 2024 as internal revenue from inter-company transactions increased by 1.1%, or Won 11 billion, from Won 1,006 billion in 2023 to Won 1,017 billion in 2024 primarily due to an increase in POSCO Future M’s revenue from sales of scrap, refractory drying and repair services to member companies of the POSCO group from 2023 to 2024.
Others Segment. External revenue from the Others Segment, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, decreased by 35.2%, or Won 40 billion, from Won 113 billion in 2023 to Won 73 billion in 2024, primarily due to a decrease in dividend income following disposals of certain of our investments in financial companies.
Total revenue from the Others Segment, which includes internal revenue from inter-company transactions, increased by 35.1%, or Won 549 billion, from Won 1,562 billion in 2023 to Won 2,111 billion in 2024 as internal revenue from inter-company transactions increased by 40.6%, or Won 589 billion, from Won 1,450 billion in 2023 to Won 2,038 billion in 2024 primarily due to an increase in dividend payments from our subsidiaries.
Our cost of sales decreased by 3.8%, or Won 2,668 billion, from Won 70,639 billion in 2023 to Won 67,971 billion in 2024 primarily due to decreases in the average prices in Won terms of some of our key raw materials for POSCO, the impact of which was partially offset by (i) depreciation of the Won against the U.S. dollar, which increased the price of our imported raw materials in Won terms and (ii) an increase in the production volume of finished steel products sold by us. With respect to the principal raw materials for our steel products, the average market price of coal per wet metric ton (Premium Low Vol Coking Coal, FOB Australia Index announced by Platts) decreased from US$296 in 2023 to US$240 in 2024. In addition, the average market price of iron ore per dry metric ton (Iron Ore 62% Fe, CFR China Index announced by Platts) decreased from US$120 in 2023 to US$109 in 2024.
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Our gross profit decreased by 14.5%, or Won 929 billion, from Won 6,417 billion in 2023 to Won 5,488 billion in 2024 primarily due to (i) a decrease in the average unit sales price in Won terms of the steel products sold by us that outpaced a decrease in the average prices in Won terms of the principal raw materials used to manufacture such products, (ii) a decrease in gross profit from POSCO Future M reflecting a slowdown in demand for anode materials, (iii) a decrease in POSCO E&C’s participation in higher margin plant and architectural works construction projects in 2024, and (iv) a decrease in gross profit from POSCO INTERNATIONAL’s trading activities. Our gross profit margin, which is gross profit as a percentage of revenue, decreased from 8.3% in 2023 to 7.5% in 2024.
The following table presents a breakdown of our selling and administrative expenses and changes therein for 2023 and 2024.
Our selling and administrative expenses increased by 12.3%, or Won 354 billion, from Won 2,885 billion in 2023 to Won 3,239 billion in 2024 primarily due to (i) recognition of reversal of impairment loss on trade accounts and notes receivable in 2023 compared to bad debt expenses recognized on trade accounts and notes receivable in 2024 and (ii) increases in wages and salaries and expenses related to post-employment benefits, the impact of which was partially offset by a decrease in freight and custody expenses. Such factors were principally attributable to the following:
In 2023, we recognized reversal of impairment loss on trade accounts and notes receivable of Won 18 billion that primarily related to trading activities of POSCO INTERNATIONAL. In 2024, we recognized bad debt expenses on trade accounts and notes receivable of Won 134 billion that primarily related to construction activities of POSCO E&C.
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Our wages and salaries increased by 4.8%, or Won 56 billion, from Won 1,156 billion in 2023 to Won 1,212 billion in 2024 primarily due to increases in wage levels.
Our expenses related to post-employment benefits increased by 47.0%, or Won 44 billion, from Won 93 billion in 2023 to Won 136 billion in 2024 primarily due to the implementation of voluntary retirement programs at certain of our sales subsidiaries in 2024.
Our freight and custody expenses decreased by 37.8%, or Won 21 billion, from Won 56 billion in 2023 to Won 35 billion in 2024 primarily due to a general decrease in freight unit shipping prices.
The following table presents a breakdown of our other operating income and changes therein for 2023 and 2024.
Gain on disposals of investments in subsidiaries, associates and joint ventures
Gain on bargain purchase
Our other operating income decreased by 3.7%, or Won 15 billion, from Won 402 billion in 2023 to Won 387 billion in 2024 primarily due to decreases in gain on disposals of investments in subsidiaries, associates and joint ventures and gain on bargain purchase, the impact of which was partially offset by increases in gain on insurance claim and gain on valuation of firm commitment. Such factors were principally attributable to the following:
Our gain on disposals of investments in subsidiaries, associates and joint ventures decreased significantly by 92.8%, or Won 183 billion, from Won 197 billion in 2023 to Won 14 billion in 2024. In 2023, such gain related primarily to our recognition of Won 185 billion of gain on disposal of investments in associates related to reclassification of QSONE Co., Ltd. as a consolidated subsidiary following our acquisition of the remaining 50% of its shares, which had been previously classified as an investment in associates.
We recognized gain on bargain purchase of Won 41 billion in 2023 related to our acquisition of additional shares of QSONE Co., Ltd. as described above, compared to no such gain in 2024.
Our gain on insurance claim increased by 1,101.1%, or Won 144 billion, from Won 13 billion in 2023 to Won 158 billion in 2024 primarily due to significant insurance payments received in 2024 in relation to the flooding caused by Typhoon Hinnamnor at Pohang Works’ facilities in September 2022 compared to no such payments in 2023.
Our gain on valuation of firm commitment increased by 308.0%, or Won 35 billion, from Won 11 billion in 2023 to Won 47 billion in 2024 primarily due to increases in the prices of non-ferrous metals relating to certain of our firm commitments.
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The following table presents a breakdown of our other operating expenses and changes therein for 2023 and 2024.
Other bad debt expenses(1)
In 2023, includes impairment loss on other receivables of Won 284 billion.
Our other operating expenses decreased by 1.0%, or Won 12 billion, from Won 1,196 billion in 2023 to Won 1,184 billion in 2024 primarily due to decreases in other bad debt expenses, impairment loss on intangible assets and loss on disposals of assets held for sale, the impact of which was substantially offset by an increase in impairment loss on property, plant and equipment. Such factors were principally attributable to the following:
Our other bad debt expenses decreased by 76.3%, or Won 222 billion, from Won 291 billion in 2023 to Won 69 billion in 2024. In 2023, such impairment loss related primarily to projects of FQM Australia Nickel. In 2024, such impairment loss related primarily to loans and other accounts receivables of POSCO INTERNATIONAL, POSCO E&C and POSCO Canada Ltd.
Our impairment loss on intangible assets decreased by 63.1%, or Won 82 billion, from Won 130 billion in 2023 to Won 48 billion in 2024. In 2023, POSCO Canada Ltd. recognized impairment loss on intellectual property rights of Won 89 billion related to its investment-in-kind of the assets and liabilities of Greenhills Mine Unincorporated Joint Venture to a new partnership established by Teck Coal Partnership. In 2024, our impairment loss on intangible assets related primarily to impairment losses on goodwill relating to POSCO VST Co., Ltd.
Our loss on disposals of assets held for sale decreased by 67.2%, or Won 69 billion, from Won 103 billion in 2023 to Won 34 billion in 2024. In 2023, such loss on disposal of assets held for sale related primarily to our disposal of CSP – Compania Siderurgica do Pecem. In 2024, such loss on disposals of assets held for sale primarily related to the disposal of POSCO Canada Ltd.’s interest in the Greenhills Mine Unincorporated Joint Venture.
Our impairment loss on property, plant and equipment increased by 120.5%, or Won 332 billion, from Won 276 billion in 2023 to Won 608 billion in 2024. In 2023, such impairment loss primarily related to termination of operations of certain lithium production facilities located in Gwangyang and Argentina. In 2024, such impairment loss primarily related to impairment losses on certain anode and cathode materials facilities that were in long-term idle status or that did not meet anticipated economic performance.
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Due to the factors described above, our operating profit decreased by 47.0%, or Won 1,286 billion, from Won 2,738 billion in 2023 to Won 1,452 billion in 2024. Our operating profit margin, which is operating profit as a percentage of revenue, decreased from 3.6% in 2023 to 2.0% in 2024.
We recorded share of profit of equity-accounted investees (net) of Won 270 billion in 2023 and share of loss of equity-accounted investees (net) of Won 256 billion in 2024.
In 2023, we recognized a net gain from our proportionate share of equity-accounted investees of Won 270 billion primarily due to our share of gains of Won 292 billion from Roy Hill Holdings Pty Ltd., Won 50 billion from South-East Asia Gas Pipeline Company Ltd., Won 39 billion from AES Mong Duong Power Company Limited and Won 35 billion from POSCO-NPS Niobium LLC, the aggregate impact of which was partially offset by our share of loss of Won 112 billion of FQM Australia Holdings Pty Ltd. and Won 82 billion of SNNC. See Note 11 to the Consolidated Financial Statements.
In 2024, we recognized a net loss from our proportionate share of equity-accounted investees of Won 256 billion primarily due to our share of losses of Won 266 billion from NCR LLC, Won 117 billion from Zhejiang Huayou-POSCO ESM Co., Ltd., Won 62 billion from SNNC and Won 49 billion from HBIS-POSCO Automotive Steel Co., Ltd., the aggregate impact of which was partially offset by our share of gain of Won 203 billion from Roy Hill Holdings Pty Ltd. See Note 11 to the Consolidated Financial Statements.
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The following table presents a breakdown of our finance income and costs and changes therein for 2023 and 2024.
Our net loss on foreign currency translations increased by 72.5%, or Won 300 billion, from Won 413 billion in 2023 to Won 713 billion in 2024, as the Won depreciated against the U.S. dollar at year-end in 2023 and further depreciated (to a much greater extent) at year-end in 2024. In terms of the Market Average Exchange Rate, the Won depreciated against the U.S. dollar from Won 1,267.3 to US$1.00 as of December 31, 2022 to Won 1,289.4 to US$1.00 as of December 31, 2023, and further depreciated to Won 1,470.0 to US$1.00 as of December 31, 2024. In addition, we recognized net gain on foreign currency transactions of Won 65 billion in 2023 compared to net loss on foreign currency transactions of Won 28 billion in 2024, as the average value of the Won against the U.S. dollar depreciated in 2023 and further depreciated (to a greater extent) in 2024. The Market Average Exchange Rate, which was Won 1,267.3 to US$1.00 as of December 31, 2022, depreciated during 2023 to an average of Won 1,305.4 to US$1.00 in 2023 and further depreciated during 2024 to an average of Won 1,364.0 to US$1.00 in 2024. Against such fluctuations, our net gain on valuations of derivatives increased by 538.7%, or Won 666 billion, from Won 124 billion in 2023 to Won 790 billion in 2024, and our net gain on derivatives transactions increased by 836.5%, or Won 107 billion, from Won 13 billion in 2023 to Won 120 billion in 2024.
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Our net gain on valuations of financial assets at fair value through profit or loss decreased by 76.9%, or Won 400 billion, from Won 521 billion in 2023 to Won 121 billion in 2024. In 2023, we recognized such net gain as interest rates in Korea generally increased in the first half of the year before stabilizing in the second half of the year, which in turn resulted in a gain on valuation of financial assets. In 2024, such net gain decreased primarily due to a decrease in the volume of short-term financial products held.
We recognized net loss on valuations of financial liabilities at fair value through profit or loss of Won 306 billion in 2023 compared to net gain on valuations of financial liabilities at fair value through profit or loss of Won 239 billion in 2024. In 2023, we recognized such net loss as the market price of our shares into which the exchangeable bonds we had issued increased, which in turn resulted in a loss on valuation of financial liabilities. In 2024, we recognized a net gain as the market price of our shares decreased, which in turn resulted in a gain on valuation of financial liabilities.
Our interest income increased by 14.9%, or Won 75 billion, from Won 502 billion in 2023 to Won 577 billion in 2024 primarily due to an increase in our average balance of interest-earning financial assets, which impact was partially offset by a general decrease in interest rates in Korea and abroad.
Our interest expenses increased by 5.0%, or Won 50 billion, from Won 1,001 billion in 2023 to Won 1,052 billion in 2024 primarily due to re-financing of matured borrowings at higher interest rates than the original interest rates of such borrowings.
Due to the factors described above, our profit before income taxes decreased by 49.7%, or Won 1,309 billion, from Won 2,635 billion in 2023 to Won 1,326 billion in 2024.
The following table presents our profit and loss by segment, prior to adjusting for goodwill and corporate fair value adjustments, elimination of inter-segment losses (profits), income tax expense and basis difference, and changes therein for 2023 and 2024.
Basis difference adjustments are related to the difference in recognizing revenue and expenses, including income tax expense, of the Construction Segment of the Infrastructure Business in connection with the development and sales of certain residential real estate between the report reviewed by the chief executive officer and the consolidated financial statements. See Notes 3 and 40 to the Consolidated Financial Statements.
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Our income tax expense decreased by 59.3%, or Won 468 billion, from Won 789 billion in 2023 to Won 321 billion in 2024, primarily due to the decrease in profit before income tax. Our effective tax rate decreased from 30.0% in 2023 to 24.2% in 2024. See Note 35 to the Consolidated Financial Statements.
In 2023, our effective tax rate of 30.0% was higher than the statutory rate of 26.4% primarily due to Won 151 billion of income tax expense resulting from tax audits of us and our subsidiaries.
Due to the factors described above, our profit decreased by 45.6%, or Won 841 billion, from Won 1,846 billion in 2023 to Won 1,005 billion in 2024. Our profit margin, which is profit as a percentage of revenue, decreased from 2.4% in 2023 to 1.4% in 2024.
Item 5.B. Liquidity and Capital Resources
The following table sets forth the summary of our cash flows for the periods indicated.
Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities
Effect of exchange rate fluctuation on cash held
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period
Capital Requirements
Historically, uses of cash consisted principally of purchases of property, plant and equipment and other assets and repayments of outstanding debt and payments of dividends. From time to time, we also use cash for repurchases of our shares as well as investments related to our diversification efforts.
Net cash used in investing activities was Won 7,388 billion in 2023, Won 4,487 billion in 2024 and Won 6,687 billion in 2025. Our cash outflows for acquisition of property, plant and equipment were Won 6,733 billion in 2023, Won 7,670 billion in 2024 and Won 5,665 billion in 2025. We currently expect our cash outflows for acquisition of property, plant and equipment and investments in joint ventures and associates to be approximately Won 11.3 trillion in 2026, which we may adjust on an on-going basis subject to market demand for our products, the production outlook of the global steel industry and global economic conditions in general. We may delay or not implement some of our current capital expenditure plans based on our assessment of such market conditions. We had net proceeds from disposal of short-term financial instruments of Won 344 billion in 2023, Won 3,667 billion in 2024 and Won 106 billion in 2025.
In our financing activities, we used cash of Won 4,461 billion in 2023, Won 7,533 billion in 2024 and Won 5,158 billion in 2025 for repayments of borrowings. We used cash of Won 815 billion in 2023, Won 844 billion in 2024 and Won 915 billion in 2025 for payments of cash dividends. In 2023, we also used Won 340 billion for repayment of hybrid bonds. In 2024, we used cash of Won 92 billion for acquisition of treasury shares. We did not acquire any treasury shares in 2023 or 2025.
In recent years, we have also selectively considered various opportunities to acquire or invest in companies that may complement our businesses, as well as invest in overseas resources development
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projects. We may require additional capital for such acquisitions or entering into other strategic relationships. Other than capital required for such activities, we anticipate that capital expenditures, repayments of outstanding debt and payments of cash dividends will represent the most significant uses of funds for the next several years.
Payments of contractual obligations and commitments will also require considerable resources. In our ordinary course of business, we routinely enter into commercial commitments for various aspects of our operations, including raw materials purchase obligations and long-term shipping service contracts, as well as issue guarantees for indebtedness of our related parties and others. For our contingent liabilities on outstanding guarantees provided by us, see Note 38 to the Consolidated Financial Statements. Our purchase obligations include supply contracts to purchase iron ore, coal, nickel, LNG and other raw materials. These contracts generally have terms of one to ten years and the long-term contracts provide for periodic price adjustments according to the market prices. As of December 31, 2025, 48 million tons of iron ore and 18 million tons of coal remained to be purchased under long-term contracts.
In addition, POSCO entered into an agreement with Tangguh LNG Consortium in Indonesia to purchase 550 thousand tons of LNG annually for 20 years commencing in August 2005. In order to compensate for a decrease in purchase volume in 2023, POSCO has agreed to purchase 120 thousand tons of LNG after completion of such 20-year term, from September 2025 to December 2026. The purchase price under the agreement with Tangguh LNG Consortium is variable based on the monthly standard oil price (as represented by the Japan Customs cleared Crude Price), subject to a ceiling.
POSCO INTERNATIONAL SINGAPORE PTE LTD. (“POSCO INTERNATIONAL SINGAPORE”) entered into a purchase agreement with Cheniere Marketing, LLC to purchase 370 thousand tons of LNG annually for 15 years commencing in November 2026, with an option to extend the agreement for five years. The purchase price is subject to adjustments based on the U.S. Henry Hub Natural Gas Spot Price. POSCO entered into an agreement to purchase such LNG from POSCO INTERNATIONAL SINGAPORE.
Capital Resources
We have traditionally met our working capital and other capital requirements principally from cash provided by operations, while raising the remainder of our requirements primarily through long-term debt and short-term borrowings. We expect that these sources will continue to be our principal sources of cash in the future. From time to time, we may also generate cash through issuance of hybrid bonds and sale of treasury shares and our holdings in available-for-sale securities.
Our net cash provided by operating activities increased by 8.0%, or Won 496 billion, from Won 6,168 billion in 2023 to Won 6,664 billion in 2024. Our profit decreased from Won 1,846 billion in 2023 to Won 1,005 billion in 2024. However, we recorded cash outflow related to increase in trade accounts and notes receivable of Won 983 billion in 2023 compared to cash inflow related to decrease in trade accounts and notes receivable of Won 1,354 billion in 2024 due to better management of our trade accounts and notes receivables. In addition, our cash used for income tax payments decreased from Won 727 billion in 2023 to Won 554 billion in 2024 and our cash generated from interest received increased from Won 448 billion in 2023 to Won 571 billion in 2024. Such positive impacts on our cash flows were partially offset by (i) cash outflow related to other current liabilities of Won 1,020 billion in 2024 compared to cash inflow related to other current liabilities of Won 15 billion in 2023 and (ii) a decrease in our cash inflow related to build up of our inventories from Won 1,313 billion in 2023 to Won 914 billion in 2024.
Our net cash provided by operating activities decreased by 31.4%, or Won 2,092 billion, from Won 6,664 billion in 2024 to Won 4,572 billion in 2025. Our profit decreased from Won 1,005 billion in 2024 to Won 527 billion in 2025. In addition, we recorded cash inflow related to decrease in trade
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accounts and notes receivable of Won 1,354 billion in 2024 compared to cash outflow related to increase in trade accounts and notes receivable of Won 649 billion in 2025. Furthermore, our cash used for income tax payments increased from Won 554 billion in 2024 to Won 840 billion in 2025 and our cash generated from dividends received decreased from Won 745 billion in 2024 to Won 438 billion in 2025. Such impacts on our cash flows were partially offset by cash outflow related to other current liabilities of Won 1,020 billion in 2024 compared to cash inflow related to other current liabilities of Won 389 billion in 2025.
We had net proceeds from borrowings, after adjusting for repayments of borrowings, Won 3,356 billion in 2023, net repayment of borrowings, after adjusting for proceeds from borrowings, of Won 1,633 billion in 2024 and net proceeds from borrowings, after adjusting for repayments of borrowings, of Won 235 billion in 2025. We had net repayment of short-term borrowings, after adjusting for proceeds of short-term borrowings, of Won 2,524 billion in 2023, net repayment of short-term borrowings, after adjusting for proceeds from short-term borrowings, of Won 218 billion in 2024 and net proceeds from short-term borrowings, after adjusting for repayments of short-term borrowings, of Won 2,159 billion in 2025. Long-term borrowings, excluding current installments, were Won 15,011 billion as of December 31, 2023, Won 14,882 billion as of December 31, 2024 and Won 16,375 billion as of December 31, 2025. Total short-term borrowings and current installments of long-term borrowings were Won 10,959 billion as of December 31, 2023, Won 11,116 billion as of December 31, 2024 and Won 12,117 billion as of December 31, 2025.
We periodically increase our short-term borrowings and adjust our long-term borrowings depending on changes in our capital requirements. For the maturity profile of our borrowings, their currency denomination and interest rates, see Notes 17 and 23 to the Consolidated Financial Statements. We continually take into consideration various factors when meeting our financial requirements, including financial market conditions, specific funding needs at a given time, and hedging requirements to address our market risks such as exchange rate risk and interest rate risk. From time to time, we also generate cash from the sale of our treasury shares. Our net borrowings-to-equity ratio, which is calculated by deducting cash and cash equivalents from total borrowings and dividing the net amount by our total equity, was 32.38% as of December 31, 2023, 31.30% as of December 31, 2024 and 34.36% as of December 31, 2025.
We believe that we have sufficient working capital for our current requirements and that we have a variety of alternatives available to us to satisfy our liquidity requirements to the extent that they are not met by funds generated by operations, including the issuance of debt and equity securities and bank borrowings denominated in Won and various foreign currencies. However, our ability to rely on some of these alternatives could be affected by factors such as the liquidity of the Korean and the global financial markets, prevailing interest rates, our credit rating and the Government’s policies regarding Won currency and foreign currency borrowings. For a discussion of our use of financial instruments for hedging purposes, see “Item 11. Quantitative and Qualitative Disclosures about Market Risk.”
Liquidity
We had working capital (current assets minus current liabilities) of Won 24,264 billion as of December 31, 2023, Won 21,324 billion as of December 31, 2024 and Won 20,514 billion as of December 31, 2025. Our holdings of cash and cash equivalents (which do not include cash and cash equivalents categorized under “assets held for sale”) were Won 6,671 billion as of December 31, 2023, Won 6,768 billion as of December 31, 2024 and Won 7,050 billion as of December 31, 2025. As of December 31, 2025, we held approximately 59% of such cash and cash equivalents denominated in Won and the remainder denominated in foreign currencies. Our holdings of other receivables (current assets) and other short-term financial assets were Won 13,351 billion as of December 31, 2023, Won 10,761 billion as of December 31, 2024 and Won 10,699 billion as of December 31, 2025. As of December 31, 2025, approximately 23% of our cash and cash equivalents, other receivables and other
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short-term financial assets were held outside of Korea, which we expect to use in our operations abroad, including capital expenditure activities. In the event that such assets are needed for our operations in Korea, such amounts are typically not restricted under local laws from being used in Korea. In addition, we believe that there are no material tax implications in the event our foreign subsidiaries elect to grant cash dividends to us. POSCO had total available credit lines of Won 3,000 billion as of December 31, 2025, Won 590 billion of which was used as of such date. We have not had, and do not believe that we will have, difficulty gaining access to short-term financing sufficient to meet our current requirements.
Our liquidity is affected by exchange rate fluctuations. See “— Overview — Exchange Rate Fluctuations.”
Capital Expenditures and Capacity Expansion
Our cash outflows for acquisition of property, plant and equipment were Won 6,733 billion in 2023, Won 7,670 billion in 2024 and Won 5,665 billion in 2025. We currently expect our cash outflows for acquisition of property, plant and equipment and investments in joint ventures and associates to be approximately Won 11.3 trillion in 2026, which we may adjust on an on-going basis subject to market demand for our products, the production outlook of the global steel industry and global economic conditions in general. We may delay or not implement some of our current capital expenditure plans based on our assessment of such market conditions.
Our current plan for capital investment in production facilities emphasizes capacity rationalization, increased production of higher value-added products, improvements in the efficiency of older facilities in order to reduce operating costs and construction and expansion of facilities related to our non-steel businesses. The following table sets out the major items of our capital expenditures as of December 31, 2025:
Restoration of Pohang Phase 3 coke ovens
Construction of anode/cathode and lithium ore commercialization plant
Construction of Gwangyang LNG terminal
Item 5.C. Research and Development, Patents and Licenses, Etc.
We maintain research and development programs to carry out basic research and applied technology development activities. As of December 31, 2025, POSCO Technical Research Laboratories, which engages in research and development efforts primarily in the areas of advanced steel manufacturing technologies, employed 628 personnel, including 432 researchers. As of December 31, 2025, our New Experience of Technology Hub, which focuses on research and development relating to (i) artificial intelligence, (ii) raw materials for rechargeable batteries and (iii) hydrogen and other environmentally-friendly energy solutions, employed 276 personnel, including 217 researchers.
Our technology development department also works closely with the Pohang University of Science & Technology, Korea’s first research-oriented college founded by us in 1986, and the Research Institute of Industrial Science and Technology, Korea’s first private comprehensive research institute founded by us in 1987. We also established POSCO Research Institute (POSRI) in 1994, which engages in research activities and consulting services.
Our research and development program has filed 48,713 industrial rights applications relating to steel-making technology, 10,155 of which were registered as of December 31, 2025, and has
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successfully applied many of these to the improvement of our manufacturing process. In addition, our research and development program has filed 2,885 industrial rights applications relating to electric vehicles and rechargeable battery materials technology, 1,684 of which were registered as of December 31, 2025.
Item 5.D. Trend Information
These matters are discussed under Item 5.A. and Item 5.B. above where relevant.
Item 5.E. Critical Accounting Estimates
Our consolidated financial statements are prepared in accordance with IFRS as issued by IASB. See Note 2 to the Consolidated Financial Statements for a discussion of our critical accounting estimates.
Item 6. Directors, Senior Management and Employees
Item 6.A. Directors and Senior Management
Board of Directors
Our board of directors has the ultimate responsibility for the management of our business affairs. Our board consists of four Inside Directors and seven Outside Directors and one Non-Standing Director. Our shareholders elect both the Inside Directors and Outside Directors at a general meeting of shareholders. Candidates for Inside Directors and Non-Standing Directors are recommended to shareholders by the board of directors after the board reviews such candidates’ qualifications, and candidates for Outside Directors are recommended to the shareholders by a separate board committee consisting of three Outside Directors (“Director Candidate Recommendation Committee”) after the committee reviews such candidates’ qualifications. Pursuant to the Korean Commercial Act and our articles of incorporation, any shareholder holding at least the statutory minimum percentage of our outstanding shares with voting rights may suggest candidates for Outside Directors to the Director Candidate Recommendation Committee.
Our board of directors maintains the following special committees:
the ESG Committee;
the Director Candidate Recommendation Committee;
the Evaluation and Compensation Committee;
the Finance Committee;
the Audit Committee; and
the CEO Candidate Pool Management Committee.
Our board committees are described in greater detail below under “— Item 6.C. Board Practices.”
Under the Commercial Code and our articles of incorporation, one Chairman should be elected among the Outside Directors and several Representative Directors may be elected among the Inside Directors by our board of directors’ resolution.
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Inside Directors
As of March 31, 2026, our Inside Directors are as follows:
Position
Responsibilities and
Division
Chang, In Hwa
Lee, Ju Tae
Chung, Seok Mo
Kim, Ki Soo
Lee, Hee Geun
Outside Directors
Each of our Outside Directors meets the applicable independence standards set forth under the rules of the FSCMA. As of March 31, 2026, our Outside Directors are as follows:
Principal Occupation
Yoo, Jin Nyoung
Yoo, Young Sook
Kwon, Tae Kyun
Sohn, Sung Kyu
Kim, Joongi
Professor, Yonsei University
Law School
Park, Sung Wook
Kim, Jooyoun
The term of office of the Outside Director elected in March 2026 is up to three years. Each Director’s term expires at the close of the ordinary general meeting of shareholders convened in respect of the fiscal year that is the last one to end during such Director’s tenure.
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Senior Management
In addition to the Inside Directors who are also our executive officers, we have the following executive officers as of March 31, 2026:
Responsibility and Division
Yoo, In Jong
Choi, Dong Yong
Lee, Sung Won
Oh, Hong Sub
Kim, Seoung Jun
Son, Byeong Swu
Hong, Yoon Sik
Lee, Jae Young
Oh, Young Dal
Kim, Seung Jun
Kim, Young Kyu
Han, Young Ah
Lee, Sung Wook
Jang, Won Joon
Yang, Weon Jun
Park, Do Eun
Im, Sang Hyug
Shin, Kun Chul
Park, Byoung Jik
Hong, Jin Sook
Ji, Young Tae
Cho, Min Young
Lim, Chie Hyeon
Kim, Moo Sang
Yoon, Il Yong
Hong, Jeong Jin
Park, Hyeon
Kim, Kyeong Chan
Lee, Jae Wan
Lee, Won Chul
Shin, Hyeong Gu
La, Seung Min
Item 6.B. Compensation
Compensation of Directors and Officers
Salaries and bonuses for Inside Directors and salaries for Outside Directors are paid in accordance with standards decided by the board of directors within the limitation of directors’ remuneration approved by the annual general meeting of shareholders. In addition, executive officers’ compensation is paid in accordance with standards decided by the board of directors. In 2025, the aggregate short-term benefits to our key management officers, which include directors (including non-standing Directors), executive officers and other officers who have significant influence and
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responsibilities in our business and operations, was Won 21.9 billion, and the aggregate retirement benefits to such persons was Won 6.4 billion.
Among those who received total annual compensation exceeding Won 500 million in 2025, the highest-paid five individuals were as follows:
Chun, Sung Lae
Jeong, Ki Seop
Item 6.C. Board Practices
ESG Committee
The ESG Committee is composed of three Outside Directors, Kim, Joongi; Yoo, Young Sook; and Kwon, Tae Kyun; and one Inside Director, Chung, Seok Mo. The ESG Committee oversees decisions with respect to our ESG policies, including policies related to environment, climate change, low carbon and governance. It also reviews operational matters of our board of directors and special committees, reviews plans related to safety and health, and manages and monitors ESG activities.
Director Candidate Recommendation Committee
The Director Candidate Recommendation Committee is composed of three Outside Directors, Sohn, Sung Kyu; Yoo, Jin Nyoung; and Kim, Joongi. The Director Candidate Recommendation Committee reviews the qualifications of potential candidates and proposes nominees to serve on our board of directors as an Outside Director. Any shareholder holding our outstanding shares with voting rights may suggest candidates for Outside Directors to the Director Candidate Recommendation Committee.
Evaluation and Compensation Committee
The Evaluation and Compensation Committee is composed of four Outside Directors, Yoo, Young Sook; Yoo, Jin Nyoung; Park, Sung Wook; and Kim, Jooyoun. The Evaluation and Compensation Committee’s primary responsibilities include establishing evaluation procedures and compensation plans for executive officers and taking necessary measures to execute such plans.
Finance Committee
The Finance Committee is composed of three Outside Directors; Kwon, Tae Kyun; Park, Sung Wook; and Kim, Jooyoun; and one Inside Director, Lee, Ju Tae. This committee is an operational committee that oversees decisions with respect to finance and operational matters, including making assessments with respect to potential capital investments and evaluating prospective capital-raising activities.
Audit Committee
Under Korean law and our articles of incorporation, we are required to have an Audit Committee. The Audit Committee may be composed of three or more directors; all members of the Audit Committee must be Outside Directors. Audit Committee members must also meet the applicable
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independence criteria set forth under the rules and regulations of the Sarbanes-Oxley Act of 2002. Members of the Audit Committee are elected by the shareholders at the ordinary general meeting of shareholders. We currently have an Audit Committee composed of three Outside Directors. Members of our Audit Committee are Park, Sung Wook; Sohn, Sung Kyu; and Kim, Joongi.
The duties of the Audit Committee include:
engaging independent auditors;
approving independent audit fees;
approving audit and non-audit services;
reviewing annual financial statements;
reviewing audit results and reports, including management comments and recommendations;
reviewing our system of controls and policies, including those covering conflicts of interest and business ethics; and
examining improprieties or suspected improprieties.
In addition, in connection with general meetings of shareholders, the committee examines the agenda for, and financial statements and other reports to be submitted by, the board of directors at each general meeting of shareholders. Our internal and external auditors report directly to the Audit Committee. The committee holds regular meetings at least once each quarter, and more frequently as needed.
CEO Candidate Pool Management Committee
The CEO Candidate Pool Management Committee is composed of all of our seven Outside Directors, Yoo, Jin Nyoung; Yoo, Young Sook; Kwon, Tae Kyun; Sohn, Sung Kyu; Kim, Joongi; Park, Sung Wook; and Kim, Jooyoun. The CEO Candidate Pool Management Committee reviews qualifications of the CEO candidates recommended by our board of directors and an executive search firm, approves candidate pooling outcomes and talent development program for prospective candidates and monitors the results of prospective candidate development program.
Item 6.D. Employees
As of December 31, 2025, we had 42,873 employees, including 31,214 persons employed by our subsidiaries, as reported to the Korea Fair Trade Commission pursuant to its guidelines for such year. Of the total number of employees, approximately 75% are technicians and skilled laborers and 25% are administrative staff. We use subcontractors for maintenance, cleaning and transport activities. We had 44,502 employees as of December 31, 2024 and 44,501 employees as of December 31, 2023, as reported to the Korea Fair Trade Commission pursuant to its guidelines for such years. Furthermore, in April 2026, we announced our plans to directly hire approximately 7,000 on-site employees of our partner companies who perform tasks directly related to our steel production processes at Pohang and Gwangyang Works, converting them into regular employees. The hiring is expected to be carried out on a phased basis in order to help ensure workplace safety, facilitate smooth integration into existing operations and comply with applicable legal procedures.
We have not experienced any material labor strikes or other material labor disputes in recent years, and we consider our current relations with our workforce to be satisfactory. Wages of our employees are among the highest of manufacturing companies in Korea. In addition to a base monthly wage, employees receive periodic bonuses and allowances. Base wages are determined annually following negotiations between the management and the majority labor union. A limited number of our employees are members of the Federation of Korean Metal Workers’ Trade Unions or the Korean
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Metal Workers’ Union. In 2025, the Federation of Korean Metal Workers’ Trade Unions conducted negotiations regarding the terms of employment with the management.
In accordance with the National Pension Act of Korea, we contribute an amount equal to 4.5% of an employee’s standard monthly wages, and each employee contributes 4.5% of his or her standard monthly wages, into his or her personal pension account, as of the date hereof. Such rates, however, are scheduled to gradually increase to 6.5% by 2033. Our employees, including executive officers as well as non-executive employees, are subject to a pension insurance system, under which we make quarterly contributions to the defined benefit plan and annual contributions to employees’ pension accounts under the defined contribution plan, and upon retirement, such employees are paid from their pension accounts. Prior to 2011, our executive and non-executive employees were subject to a lump-sum severance payment system, under which they were entitled to receive a lump-sum severance payment upon termination of their employment, based on their length of service and salary level at the time of termination. Starting in 2011, in accordance with the Korean Employee Retirement Income Security Act, we replaced such lump-sum severance payment system with our current pension insurance system in the form of either a defined benefit plan or a defined contribution plan. Our employees have the option of choosing either the defined benefit plan or the defined contribution plan. See Note 21 to the Consolidated Financial Statements. Lump-sum severance amounts previously accrued prior to our adoption of the current pension insurance system continue to remain payable. We also provide a wide range of fringe benefits to our employees, including housing, housing loans, company-provided hospitals and schools, a company-sponsored pension program, an employee welfare fund, industrial disaster insurance and cultural and athletic facilities.
As of December 31, 2025, our employees owned, through our employee stock ownership association, approximately 1.61% of our common stock in their employee accounts.
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Item 6.E. Share Ownership
The persons who are currently our Directors or executive officers held, as a group, 22,474 common shares as of March 31, 2026. The table below shows the ownership of our common shares by our Directors and executive officers.
Item 6.F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation
Item 7. Major Shareholders and Related Party Transactions
Item 7.A. Major Shareholders
The following table sets forth certain information relating to the shareholders of our common stock issued as of December 31, 2025.
Shareholders
National Pension Service
BlackRock Fund Advisors (1) (2) (3)
CITIBANK N.A. (4)
Pohang University of Science and Technology
Samsung Group (5)
Treasury shares
Total issued shares of common stock
Includes ADRs.
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Includes shares held by subsidiaries and others.
The number of shares owned by the shareholder is based on the status report of large-scale shareholders filed with the U.S. Securities and Exchange Commission.
As depositary of our ADRs.
Includes shares held by Samsung Asset Management, Samsung Life Insurance, Samsung Active Asset Management and Samsung Securities.
As of December 31, 2025, there were 2,289,755 shares of common stock outstanding in the form of ADRs, representing 2.83% of the total issued shares of common stock.
Item 7.B. Related Party Transactions
We have issued guarantees in favor of affiliated and related companies, and we have also engaged in various transactions with our related parties. See Notes 37 and 38 to the Consolidated Financial Statements.
As of December 31, 2023, 2024 and 2025, we had no loans outstanding to our executive officers and Directors.
Item 7.C. Interests of Experts and Counsel
Item 8. Financial Information
Item 8.A. Consolidated Statements and Other Financial Information
See “Item 18. Financial Statements” and pages F-1 through F-135.
Legal Proceedings
Trade Remedy Proceedings
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Loans to Daewoo Motors India Guaranteed by Predecessor of POSCO INTERNATIONAL
In May 2002, Industrial Development Bank of India brought a suit against Daewoo International Corporation (currently, POSCO INTERNATIONAL), Daewoo Motors India Ltd., Daewoo Corporation and Daewoo Construction & Engineering Co., Ltd. in the India Delhi Mumbai Court, regarding its loans to Daewoo Motors India Ltd. guaranteed by Daewoo Co., Ltd. (predecessor of POSCO INTERNATIONAL). The total claim amount is 4.46 billion Indian Rupees, and POSCO INTERNATIONAL recognized provision of Won 6.4 billion relating to its portion of the guarantee alleged by Industrial Development Bank of India. Daewoo International Corporation challenged the jurisdiction of the court in 2003. The outcome of such lawsuits remains uncertain and POSCO INTERNATIONAL’s provision is classified as a non-current liability as of December 31, 2025.
Legal Proceedings Related to the Songdo Project
In March 2019, NSC Investment LLC, an affiliate of Gale Investments Company, LLC and a former joint venture partner of POSCO E&C in the urban planning and development project in Songdo International City in Incheon (the “Songdo Project”), filed a claim in the United States District Court for the Southern District of New York and filed a request for arbitration pursuant to the rules of the International Court of Arbitration of the International Chamber of Commerce (“ICA”) against POSCO E&C, claiming POSCO E&C wrongfully seized and sold certain properties of the claimants. In December 2013, the joint venture, consisting of POSCO E&C and NSC Investment LLC, entered into a series of loan facility agreements with several lenders to finance the Songdo Project, with the joint venture partners’ respective stakes in the joint venture pledged as collateral. The loan facility agreements entitled POSCO E&C to certain subrogation rights related to guaranteeing the obligations of the joint venture to repay the principal amounts of the loans. In 2017, upon default of certain series of the loans, POSCO E&C exercised such subrogation rights, claimed the pledged assets of the claimant and sold such assets. The claimants claimed damages of approximately US$2.3 billion allegedly resulting from POSCO E&C’s purported wrongful seizure and sale of such properties as well as alleged overcharges made by POSCO E&C while serving as the construction contractor for the Songdo Project. The claim in the United States District Court for the Southern District of New York was dismissed in November 2020, and the ICA dismissed all claims against POSCO E&C in October 2022.
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In September 2023, however, one of the claimants filed a claim against POSCO E&C in the Seoul Central District Court, claiming that it is entitled to damages of Won 20 billion. The basis of the claim is substantially similar to those made in the ICA arbitration proceeding described above. POSCO E&C intends to vigorously defend against such lawsuit.
Legal Proceedings Related to Contract-based Workers Dispatched by Third-party Contractors
For a description of our legal proceedings related to contract-based workers dispatched by third-party contractors, see “Item 3.D. Risk Factors — Labor laws and a recent Supreme Court decision on contract-based workers dispatched by third-party contractors could restrict flexibility in our labor management and result in an increase in our labor-related costs.”
Legal Proceeding Related to Relining of the No. 2 Blast Furnace at Gwangyang Works
In February 2025, a group of ten individuals filed a lawsuit at the Daegu District Court against POSCO seeking an injunction to stop the refurbishment of the No. 2 blast furnace at Gwangyang Works alleging that such refurbishment violates their right to a healthy environment. POSCO intends to vigorously defend against such lawsuit. See “Item 3. Key Information — Item 3.D. Risk Factors — We are subject to environmental regulations, and our operations could expose us to substantial liabilities.”
Dividends
The amount of dividends paid on our common stock is subject to approval at the annual general meeting of shareholders, which is typically held in February or March of the following year. In addition to our annual dividends, our board of directors is authorized to declare and distribute quarterly dividends under our articles of incorporation. If we decide to pay quarterly dividends, our articles of incorporation authorize us to pay them in cash to the shareholders and registered pledgees recorded as of the record date determined by a board resolution. We may pay cash dividends out of retained earnings that have not been appropriated to statutory reserves.
The table below sets out the annual dividends declared on the outstanding common stock to shareholders of record on December 31 of the years indicated and the interim dividends (including quarterly dividends), declared on the outstanding common stock to applicable shareholders of record of the years indicated. A total of 80,932,952 shares of common stock were issued as of December 31, 2025. Of these shares and as of such date, 75,620,779 shares were outstanding and 5,312,173 shares were held by us in treasury. The annual dividends set out for each of the years below were paid in the immediately following year.
Year
2021
2022
Owners of the ADSs are entitled to receive any dividends payable in respect of the underlying shares of common stock.
Historically, we have paid to holders of record of our common stock an annual dividend. However, we can give no assurance that we will continue to declare and pay any dividends in the future.
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Item 8.B. Significant Changes
Except as disclosed elsewhere in this Annual Report on Form 20-F, we have not experienced any significant changes since the date of our Consolidated Financial Statements included in this Annual Report on Form 20-F.
Item 9. The Offer and Listing
Item 9.A. Offer and Listing Details
Notes
Common Stock
The principal trading market for our common stock is the KRX KOSPI Market. Our common stock, which is in registered form and has a par value of Won 5,000 per share, has been listed on the KRX KOSPI Market since June 1988 under the identifying code 005490.
ADSs
Our common stock is also listed on the New York Stock Exchange in the form of ADSs. The ADSs have been issued by Citibank, N.A. as ADR depositary and are listed on the New York Stock Exchange under the symbol “PKX.” One ADS represents one-fourth of one share of common stock. As of December 31, 2025, there were 2,289,755 shares of common stock outstanding in the form of ADSs, representing 2.83% of the total issued shares of common stock.
Item 9.B. Plan of Distribution
Item 9.C. Markets
See “Item 9.A. Offering and Listing Details.”
Item 9.D. Selling Shareholders
Item 9.E. Dilution
Item 9.F. Expenses of the Issuer
Item 10. Additional Information
Item 10.A. Share Capital
Currently, our authorized share capital is 200,000,000 shares, which consists of shares of common stock, par value Won 5,000 per share (“Common Shares”) and shares of non-voting stock, par value Won 5,000 per share (“Non-Voting Preferred Shares”). Our Non-Voting Preferred Shares have a preferential right to dividend payments. Common Shares and Non-Voting Preferred Shares
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together are referred to as “Shares.” Under our articles of incorporation, we are authorized to issue Non-Voting Preferred Shares up to the limit prescribed by applicable law, the aggregate of which currently is one-quarter of our total issued and outstanding capital stock. As of December 31, 2025, 80,932,952 Common Shares were issued, of which 5,312,173 shares were held by us in treasury. We have never issued any Non-Voting Preferred Shares. All of the issued and outstanding Common Shares are fully-paid and non-assessable and are in registered form. We issue share certificates in denominations of 1, 5, 10, 50, 100, 500, 1,000 and 10,000 shares.
Item 10.B. Memorandum and Articles of Association
Under Article 2 of our articles of incorporation, the primary purpose of POSCO HOLDINGS INC. is to engage in, among others: controlling the businesses of, and guiding, organizing and improving the management of, subsidiaries by acquiring and owning the shares or ownership interests in subsidiaries (including sub-subsidiaries and companies controlled by such sub-subsidiaries, collectively “subsidiaries”); the management and licensing of intellectual property rights including brands and trademarks; investments related to start-up assistance and new technology; market research, management advisory and consulting services; technology research and commissioned services; matters entrusted by subsidiaries to assist the subsidiaries’ businesses; the supply of gas such as hydrogen and resources development business; the leasing of real estate and distribution businesses; and any other activities that are related, directly or indirectly, to the attainment and continuation of the foregoing purposes.
The following provides information relating to our capital stock, including brief summaries of material provisions of our articles of incorporation, the FSCMA, the Commercial Code and related laws, all as currently in effect. The following summaries are subject to, and are qualified in their entirety by reference to, our articles of incorporation and the applicable provisions of the FSCMA and the Commercial Code. We have filed copies of our articles of incorporation and these laws (except for the newly enacted the FSCMA) as exhibits to registration statements under the Securities Act or the Securities Exchange Act previously filed by us.
Under our articles of incorporation and the Commercial Code, any director who has a special interest in a proposal or a resolution is prohibited from voting on such proposal or resolution at the meeting of the board of directors. Any resolution of the board of directors must be approved by an affirmative majority vote of the directors present at the meeting of the board of directors. The compensation for directors, including severance benefits, is paid within the limitation approved by the annual general meeting of shareholders.
We distribute dividends to our shareholders in proportion to the number of shares owned by each shareholder. The Common Shares represented by the ADSs have the same dividend rights as other outstanding Common Shares.
Holders of Non-Voting Preferred Shares are entitled to receive dividends in priority to the holders of Common Shares in an amount not less than 9% of the par value of the Non-Voting Preferred Shares as determined by the board of directors at the time of their issuance. If the amount available for dividends is less than the aggregate amount of such minimum dividend, we do not have to declare dividends on the Non-Voting Preferred Shares. As of the date hereof, we have no Non-Voting Preferred Shares issued and outstanding.
We may declare dividends annually at the annual general meeting of shareholders which is held within three months after the end of the fiscal year. We pay the annual dividend shortly after the annual general meeting to the shareholders and registered pledgees of record as of the record date as
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determined by a resolution of the board of directors. In addition, we may declare quarterly dividends pursuant to a board resolution held within 45 days from the end of March, June and September of each fiscal year to the eligible shareholders and registered pledgees recorded as of the record date determined by a resolution of the board of directors. We may distribute the annual dividend in cash, Shares or other form of property. However, we may distribute the quarterly dividend only in cash. A dividend of Shares must be distributed at par value and may not exceed 100% of the dividends declared each fiscal year in the aggregate; provided, however, that such dividend is required to be limited to half of the aggregate dividend amount if the market price of the Common Shares is lower than the par value of the Common Share. We have no obligation to pay any dividend unclaimed for five years from the payment date.
Under the Commercial Code, we may pay dividends only to the extent the net asset amount in our balance sheets exceeds the sum of the following: (i) our stated capital, (ii) the total amount of our capital surplus reserve and earned surplus reserve accumulated up to the end of the relevant dividend period, (iii) the legal reserve to be set aside for dividends, and (iv) unrealized profits determined in the Presidential Decree to the Commercial Code. We may not pay dividends unless we have set aside as earned surplus reserve an amount equal to at least 10% of the cash portion of dividends ; provided, however, that we may pay dividends if the total amount of the earned surplus reserve is accumulated up to one-half of our stated capital. We may not use legal reserve to pay cash dividends but may transfer amounts from legal reserve to capital stock or use legal reserve to reduce an accumulated deficit.
Distribution of Free Shares
In addition to paying dividends in Shares out of our retained or current earnings, we may also distribute to our shareholders an amount transferred from our capital surplus or legal reserve to our stated capital in the form of free shares. We must distribute such free shares to all our shareholders in proportion to their existing shareholdings.
Preemptive Rights and Issuance of Additional Shares
We may issue authorized but unissued shares at times and, unless otherwise provided in the Commercial Code or our articles of incorporation, on the terms our board of directors may determine. All our shareholders are generally entitled to subscribe for any newly issued Shares in proportion to their existing shareholdings. We must offer new Shares on uniform terms to all shareholders who have preemptive rights and are listed on our shareholders’ register as of the relevant record date. Under the Commercial Code, we may vary, without shareholders’ approval, the terms of these preemptive rights for different classes of shares. We must give public notice of the preemptive rights regarding new Shares and their transferability at least two weeks before the relevant record date. If certain shareholders do not exercise their preemptive rights, we are required to cancel the proposed issuances of such unsubscribed portion of new Shares, unless otherwise permitted by the FSCMA.
Under our articles of incorporation, we may issue new Shares pursuant to a board resolution to persons other than existing shareholders, who in these circumstances will not have preemptive rights, if the new Shares are:
offered publicly or to underwriters for underwriting pursuant to the FSCMA and other applicable regulations;
issued to members of our employee stock ownership association pursuant to the FSCMA and other applicable regulations;
represented by depositary receipts pursuant to the FSCMA and other applicable regulations;
issued in a general public offering pursuant to a board resolution in accordance with the FSCMA and other applicable regulations, the amount of which is no more than 10% of the outstanding Shares;
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issued to our creditors pursuant to a debt-equity swap;
issued to domestic or foreign entities pursuant to a joint venture agreement, strategic coalition or technology license or transfer agreement when deemed necessary for management purposes; or
issued to domestic or foreign financial institutions when necessary for raising funds in emergency cases.
In addition, we may issue convertible bonds or bonds with warrants, each up to an aggregate principal amount of Won 2 trillion, to persons other than existing shareholders.
Members of our employee stock ownership association, whether or not they are our shareholders, generally have a preemptive right to subscribe for up to 20% of the Shares publicly offered pursuant to the FSCMA. This right is exercisable only to the extent that the total number of Shares so acquired and held by members of our employee stock ownership association does not exceed 20% of the total number of Shares then issued. As of December 31, 2025, our employees owned, through our employee stock ownership association, approximately 1.61% of our common stock in their employee accounts.
General Meeting of Shareholders
We hold the annual general meeting of shareholders within three months after the end of each fiscal year. The record date of the register of shareholders is December 31 of each year, and such shareholders listed on the register of shareholder as of the record date are entitled to exercise their right at the general meeting of shareholders. Subject to a board resolution, court approval or other applicable laws and regulations, we may hold an extraordinary general meeting of shareholders:
as necessary;
at the request of holders of an aggregate of 3% or more of our outstanding Shares;
at the request of shareholders holding an aggregate of 1.5% or more of our outstanding Shares for at least six months; or
at the request of our Audit Committee.
Holders of Non-Voting Preferred Shares may request a general meeting of shareholders only after the Non-Voting Preferred Shares become entitled to vote or “enfranchised,” as described under “— Voting Rights” below.
We must give shareholders written notice or electronic document setting out the date, place and agenda of the meeting at least two weeks before the date of the general meeting of shareholders. However, for holders of 1% or less of the total number of issued and outstanding voting Shares, we may give notice by placing at least two public notices in at least two daily newspapers or by notices to be posted on the electronic disclosure database system maintained by the Financial Supervisory Service or the Korea Exchange at least two weeks in advance of the meeting. Currently, we use The Seoul Shinmun published in Seoul, The Maeil Shinmun published in Taegu and The Kwangju Ilbo published in Kwangju for this purpose. Shareholders not on the shareholders’ register as of the record date are not entitled to receive notice of the general meeting of shareholders or attend or vote at the meeting. Holders of Non-Voting Preferred Shares, unless enfranchised, are not entitled to receive notice of general meetings of shareholders, but may attend such meetings. Our general meetings of shareholders are held either in Seoul, Pohang, where our registered main office is located, or at a near-by place if necessary. Our general meetings of shareholders are held in a manner that allows some shareholders to participate in and vote on resolutions from remote locations by electronic means, without being physically present at the venue of the meeting.
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Voting Rights
Holders of our Common Shares are entitled to one vote for each Common Share, except that voting rights of Common Shares held by us, or by a corporate shareholder that is 10% (or more) owned by us either directly or indirectly, may not be exercised. The Commercial Code permitted cumulative voting, under which voting method each shareholder would have multiple voting rights corresponding to the number of directors to be appointed in the voting and may exercise all voting rights cumulatively to elect one director.
Our shareholders may adopt resolutions at a general meeting by an affirmative majority vote of the voting Shares present or represented at the meeting, where the affirmative votes also represent at least one-fourth of our total voting Shares then issued and outstanding. However, under the Commercial Code and our articles of incorporation, the following matters, among others, require approval by the holders of at least two-thirds of the voting Shares present or represented at a meeting, where the affirmative votes also represent at least one-third of our total voting Shares then issued and outstanding:
amending our articles of incorporation;
removing a director;
effecting any dissolution, merger or consolidation of us;
transferring the whole or any significant part of our business;
acquisition of all or a part of the business of any other company that may have a material impact on our business;
issuing any new Shares at a price lower than their par value; or
approving matters required to be approved at a general meeting of shareholders, which have material effects on our assets, as determined by the board of directors.
In general, holders of Non-Voting Preferred Shares are not entitled to vote on any resolution or receive notice of any general meeting of shareholders. However, in the case of amendments to our articles of incorporation, or any merger or consolidation of us, or in some other cases that affect the rights or interests of the Non-Voting Preferred Shares, approval of the holders of Non-Voting Preferred Shares is required. We may obtain the approval by a resolution of holders of at least two-thirds of the Non-Voting Preferred Shares present or represented at a class meeting of the holders of Non-Voting Preferred Shares, where the affirmative votes also represent at least one-third of our total issued and outstanding Non-Voting Preferred Shares.
Shareholders may exercise their voting rights by proxy. A proxy shall submit a document or an electronic document evidencing the power of representation to us before the opening of the general meeting of shareholders. When a shareholder is a corporate entity, such shareholder may give proxies to its officers or directors.
Holders of ADRs exercise their voting rights through the ADR depositary, an agent of which is the record holder of the underlying Common Shares. Subject to the provisions of the deposit agreement, ADR holders are entitled to instruct the ADR depositary how to vote the Common Shares underlying their ADSs.
Rights of Dissenting Shareholders
In some limited circumstances, including the transfer of the whole or any significant part of our business and our merger or consolidation with another company, dissenting shareholders have the right to require us to purchase their Shares. Only the shareholders who have executed a share purchase agreement evidencing their acquisition of the relevant Shares on or prior to the day immediately following the public disclosure of the board resolutions approving any of the
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aforementioned transactions have the rights to require us to purchase their Shares. To exercise this right, shareholders, including holders of Non-Voting Preferred Shares, must submit to us a written notice of their intention to dissent before the general meeting of shareholders. Within 20 days after the relevant resolution is passed at a meeting, the dissenting shareholders must request us in writing to purchase their Shares. We are obligated to purchase the Shares of dissenting shareholders within one month after the expiration of the 20-day period. The purchase price for the Shares is required to be determined through negotiation between the dissenting shareholders and us. If we cannot agree on a price through negotiation, the purchase price will be the average of (1) the weighted average of the daily Share prices on the Korea Exchange for the two-month period before the date of the adoption of the relevant board resolution, (2) the weighted average of the daily Share price on the Korea Exchange for the one month period before the date of the adoption of the relevant resolution and (3) the weighted average of the daily Share price on the Korea Exchange for the one week period before such date of the adoption of the relevant resolution. However, the court may determine this price if we or dissenting shareholders do not accept the purchase price. Holders of ADSs will not be able to exercise dissenter’s rights unless they have withdrawn the underlying common stock and become our direct shareholders.
Register of Shareholders and Record Dates
We maintain the register of our shareholders electronically through Kookmin Bank, our transfer agent. Kookmin Bank performs electronic registration of our Shares, manages the electronic register of our shareholders and oversees other matters related to our Shares.
The record date for annual dividends is determined by a board resolution. For the purpose of determining the shareholders entitled to annual dividends, the register of shareholders may be closed for the period from January 1 to January 15 of each year. Further, for the purpose of determining the shareholders entitled to some other rights pertaining to the Shares, we may, on at least two weeks’ public notice, set a record date and/or close the register of shareholders for not more than three months. The trading of Shares may continue while the register of shareholders is closed. However, pursuant to the Act on Electronic Registration of Stocks, Bonds, etc., which became effective on September 16, 2019, the closure of the register of shareholders is not required in order to determine the shareholders entitled to certain shareholder rights. Instead, we may set the record date by a board resolution and determine the shareholders of record as of such record date without closing the register of shareholders.
Annual Report
At least one week before the annual general meeting of shareholders, we must make our annual report and audited financial statements available for inspection at our principal office and at all of our branch offices. In addition, copies of annual reports, the audited financial statements and any resolutions adopted at the general meeting of shareholders will be available to our shareholders.
Under the FSCMA, we must file with the Financial Services Commission and the Korea Exchange (1) an annual business report within 90 days after the end of our fiscal year, (2) a half-year report within 45 days after the end of the first six months of our fiscal year, and (3) quarterly reports within 45 days after the end of the third month and the ninth month of our fiscal year. Copies of these reports are or will be available for public inspection at the electronic disclosure database system maintained by the Financial Supervisory Service and the Korea Exchange.
Transfer of Shares
Under the Act on Electronic Registration of Stocks, Bonds, etc., the transfer of Shares is effected by electronic registration of such transfer. Once the transfer of Shares is electronically registered, the transferee is entitled to the shareholders’ rights.
Under current Korean regulations, the Korea Securities Depository, foreign exchange banks (including domestic branches of foreign banks), financial investment companies with a brokerage,
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dealing or collective investment license and internationally recognized custodians may act as agents and provide related services for foreign shareholders. Certain foreign exchange controls and securities regulations apply to the transfer of Shares by non-residents or non-Koreans. See “Item 10. Additional Information — Item 10.D. Exchange Controls.”
Our transfer agent is Kookmin Bank, located at 26, Gukjegeumyung-ro 8-gil, Yeongdeungpo-gu, Seoul, Korea.
Acquisition, Holding and Disposition of Treasury Shares by Us
We may acquire our own Shares, subject to the approval by the general meeting of shareholders. In addition, we may acquire Shares through purchases on the Korea Exchange or through a tender offer or by acquiring the interests in a trust account holding our own Shares through agreements with trust companies and asset management companies. The aggregate purchase price for the Shares may not exceed the total amount available for distribution of dividends available at the end of the preceding fiscal year less the amount of dividends and mandatory reserves required to be set aside for that fiscal year, subject to certain procedural requirements. Under the Commercial Code, as amended, and in effect as of March 6, 2026 (Act No. 21448, the “Amended Commercial Code”), we may not exercise shareholder rights with respect to our own Shares, and, in principle, our own Shares must be cancelled within one year from the date of acquisition by a resolution of the board of directors. However, where statutory exceptions apply (including those specified in our Articles of Incorporation), our own Shares may be held or disposed of upon approval of the general meeting of shareholders.
With respect to our own Shares held by us prior to the effectiveness of the Amended Commercial Code, a transitional grace period is granted depending on certain conditions applicable to our own Shares, and such Shares must be cancelled within one year from the relevant reference date. For example, our own Shares acquired directly by us prior to the effective date of the Amended Commercial Code must be cancelled within one year from the date falling six months after such effective date, which is September 5, 2027.
In accordance with the Commercial Code, we may resell or transfer any Shares acquired by us to a third party, subject to the approval by the general meeting of shareholders based on our treasury share holding and disposition plan executed by all directors. For reference, the mandatory contents of such plan include: (i) the purpose of holding or disposing of our own Shares; (ii) the class and number of shares subject thereto and the method of acquisition; (iii) details as of the commencement of holding and the expected time of disposition, including (a) the class and number of our own Shares and method of acquisition, (b) the class and number of issued shares excluding our own Shares, and (c) changes in the ratio of our own Shares to total issued shares; (iv) the expected holding period; and (v) the expected timing of disposition. In general, corporate entities in which we own more than 50% equity interest may not acquire our Shares, unless otherwise permitted by the Korean Commercial Code. Under the FSCMA, we are subject to certain selling restrictions for the Shares acquired by us.
Under the Amended Commercial Code, if a listed company (i) fails to cancel its own Shares within one year from the date of acquisition without shareholder approval, or (ii) holds or disposes of its own Shares in violation of a treasury share holding and disposition plan approved by the shareholders, its directors or relevant officers may be subject to an administrative fine of up to Won 50 million.
Liquidation Rights
In the event of our liquidation, after payment of all debts, liquidation expenses and taxes, our remaining assets will be distributed among shareholders in proportion to their shareholdings. Holders of Non-Voting Preferred Shares have no preference in liquidation.
Item 10.C. Material Contracts
None.
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Item 10.D. Exchange Controls
Shares and ADSs
The Foreign Exchange Transaction Act and the Presidential Decree and regulations under that Act and Decree (collectively, “Foreign Exchange Transaction Laws”) and the Foreign Investment Promotion Law regulate investment in Korean securities by non-residents and issuance of securities outside Korea by Korean companies. Under the Foreign Exchange Transaction Laws, non-residents may invest in Korean securities subject to procedural requirements in accordance with these laws. The Financial Services Commission has also adopted, pursuant to its authority under the FSCMA, regulations that restrict investment by foreigners in Korean securities.
Subject to certain limitations, the Ministry of Finance and Economy has the authority to take the following actions under the Foreign Exchange Transaction Laws:
if the Government deems it necessary on account of war, armed conflict, natural disaster or grave and sudden and significant changes in domestic or foreign economic circumstances or similar events or circumstances, the Ministry of Finance and Economy may (i) temporarily suspend performance under any or all foreign exchange transactions, in whole or in part, to which the Foreign Exchange Transaction Laws apply (including suspension of payment and receipt of foreign exchange), (ii) impose an obligation to deposit, safe-keep or sell precious metal or any other means of payment to The Bank of Korea, a foreign exchange stabilization fund or certain other governmental agencies or financial companies or (iii) require Korean creditors to collect debts owed by non-Korean debtors and deposit them in their bank accounts in Korea; and
if the Government concludes that the international balance of payments and international financial markets are experiencing or are likely to experience significant disruption or that the movement of capital between Korea and other countries is likely to adversely affect its currency policies, exchange rate policies or other macroeconomic policies, the Ministry of Finance and Economy may take action to require any person who intends to effect a capital transaction to obtain permission or to require any person who effects a capital transaction to deposit a portion of the means of payment acquired in such transactions with The Bank of Korea, a foreign exchange stabilization fund or certain other governmental agencies or financial companies.
Government Review of Issuance of ADSs
In order for us to issue shares represented by ADSs, we are required to file a prior report of the issuance with our designated foreign exchange bank or the Ministry of Finance and Economy, depending on the issuance amount. No further Korean governmental approval is necessary for the initial offering and issuance of the ADSs.
The depositary bank is required to obtain our prior consent for the number of shares to be deposited in any given proposed deposit which exceeds the difference between (1) the aggregate number of shares deposited by us for the issuance of ADSs (including deposits in connection with the initial and all subsequent offerings of ADSs and stock dividends or other distributions related to these ADSs) and (2) the number of shares on deposit with the depositary bank at the time of such proposed deposit. We can give no assurance that we would grant our consent, if our consent is required.
Reporting Requirements for Holders of Substantial Interests
Under the FSCMA, any person whose direct or beneficial ownership of a listed company’s shares with voting rights, whether in the form of shares or ADSs, certificates representing the rights to subscribe for Shares and equity-related debt securities including convertible bonds and bonds with warrants (collectively, “Equity Securities”) together with the Equity Securities beneficially owned by
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certain related persons or by any person acting in concert with the person accounts for 5% or more of the total outstanding Equity Securities of such listed company is required to report the status and the purpose (whether or not to exert an influence on management control over the issuer) of the holdings to the Financial Services Commission and the Korea Exchange within five business days after reaching the 5% ownership interest. In addition, any change in the purpose of holding such ownership interest or a change in the ownership interest subsequent to the report which equals or exceeds 1% of the total outstanding Equity Securities is required to be reported to the Financial Services Commission and the Korea Exchange within five business days from the date of the change. However, the reporting deadline of such reporting requirement is extended (1) for certain professional investors, as specified by the Presidential Decrees under the FSCMA, (i) to the tenth day of the month immediately following the month of such change in their shareholding if the shares are held with the intention of actively exercising shareholder rights as provided by the applicable laws, but without the intention of exercising management control or (ii) to the tenth day of the month immediately following the quarter of such change in their shareholding if the shares are held for portfolio investment purposes; and (2) for persons other than such professional investors, (i) to the tenth business day of the date of such change in their shareholding if the shares are held with the intention of exercising the statutory rights of shareholders as provided by the applicable laws, but without the intention of exercising management control or (ii) to the tenth day of the month immediately following the month of such change in their shareholding if the shares are held for portfolio investment purposes. Those who report the purpose of shareholding as management control of the issuer are prohibited from exercising their voting rights and acquiring additional shares for five days subsequent to their report under the FSCMA.
Violation of these reporting requirements may subject a person to criminal sanctions such as fines or imprisonment and may result in a loss of voting rights with respect to the ownership of Equity Securities exceeding 5%. Furthermore, the Financial Services Commission may issue an order to dispose of Equity Securities for which the reporting requirements were violated.
In addition to the reporting requirements described above, any person whose direct or beneficial ownership of a listed company’s voting stock accounts for 10% or more of the total issued and outstanding voting stock (a “major stockholder”) must report the status of his or her shareholding to the Securities and Futures Commission and the Korea Exchange within five business days after he or she becomes a major stockholder. In addition, any change in his or her ownership interest subsequent to the report must be reported to the Securities and Futures Commission and the Korea Exchange within five business days. However, the reporting deadline of such reporting requirement is extended (i) to the tenth day of the month immediately following the month of such change in their shareholding for certain professional investors, as specified by the Presidential Decree under the FSCMA, who hold shares with the intention of actively exercising shareholder rights as provided by the applicable laws, but without the intention of exercising management control or (ii) to the tenth day of the month immediately following the quarter of such change in their shareholding if the shares are held for portfolio investment purposes. Violation of these reporting requirements may subject a person to criminal sanctions such as fines or imprisonment.
Under the KRX regulations, if a company listed on the KRX KOSPI Market has submitted public disclosure of material matters to a foreign financial investment supervisory authority pursuant to the laws of the foreign jurisdiction, then it must submit a copy of the public disclosure and a Korean translation thereof to the Korea Exchange. In addition, if a company listed on the KRX KOSPI Market is approved for listing on a foreign stock exchange or determined to be de-listed from the foreign stock exchange or actually lists on, or de-lists from, a foreign stock exchange, then it must submit to the Korea Exchange a copy, together with a Korean translation thereof, of all documents submitted to, or received from, the relevant foreign government, supervisory authority or stock exchange.
Restrictions Applicable to ADSs
No Korean governmental approval is necessary for the sale and purchase of ADSs in the secondary market outside Korea or for the withdrawal of shares underlying ADSs and the delivery
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inside Korea of shares in connection with the withdrawal. The acquisition of the shares by a foreigner must be immediately reported by the foreigner or his standing proxy in Korea to the Governor of the Financial Supervisory Service (“Governor”).
Persons who have acquired shares as a result of the withdrawal of shares underlying the ADSs may exercise their preemptive rights for new shares, participate in free distributions and receive dividends on shares without any further governmental approval.
In addition, under the Financial Services Commission regulations, effective as of November 30, 2006, we are required to file a securities registration statement with the Financial Services Commission and such securities registration statement has to become effective pursuant to the FSCMA in order for us to issue shares represented by ADSs, except in certain limited circumstances.
Restrictions Applicable to Shares
Under the Foreign Exchange Transaction Laws and the Financial Services Commission regulations (together, the “Investment Rules”), foreigners may invest, with limited exceptions and subject to procedural requirements, in all shares of Korean companies, whether listed on the KRX KOSPI Market or the KRX KOSDAQ Market, unless prohibited by specific laws. Foreign investors may trade shares listed on the KRX KOSPI Market or the KRX KOSDAQ Market only through the KRX KOSPI Market or the KRX KOSDAQ Market, except in limited circumstances, including, among others:
odd-lot trading of shares;
acquisition of shares (“Converted Shares”) by exercise of warrant, conversion right under convertible bonds, exchange right under exchangeable bonds or withdrawal right under depositary receipts issued outside of Korea by a Korean company;
acquisition of shares as a result of inheritance, donation, bequest or exercise of shareholders’ rights, including preemptive rights or rights to participate in free distributions and receive dividends;
over-the-counter transactions between foreigners of shares of a public service corporation for which the ceiling on aggregate acquisition by foreigners, as explained below, has been reached or exceeded with certain exceptions;
acquisition of shares by direct investment as defined in the Foreign Investment Promotion Law or disposal of such shares;
disposal of shares pursuant to the exercise of appraisal rights of dissenting shareholders;
acquisition or disposal of shares in connection with a tender offer;
acquisition of underlying shares by a foreign depositary in connection with the issuance of depositary receipts;
acquisition and disposal of shares through overseas stock exchange market if such shares are simultaneously listed on the KRX KOSPI Market or the KRX KOSDAQ Market and such overseas stock exchange; and
arm’s length transactions between foreigners, if all of such foreigners belong to an investment group managed by the same person.
For over-the-counter transactions between foreign investors outside the KRX KOSPI Market or the KRX KOSDAQ Market involving shares of a public service corporation for which the limit on aggregate foreign ownership has been reached or exceeded, an investment broker licensed in Korea must act as an intermediary. Odd-lot trading of shares outside the KRX KOSPI Market or the KRX KOSDAQ Market must involve an investment dealer licensed in Korea. Foreign investors are prohibited from engaging in margin trading by borrowing shares from investment brokers or investment dealers with respect to shares that are subject to foreign ownership limitation.
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Acquisition or sale of shares outside the Korea Exchange by a foreign investor must be reported by the foreign investor or his standing proxy to the Governor at the time of each such acquisition or sale; provided, however, that a foreign investor must ensure that any acquisition or sale by it of shares outside the Korea Exchange in the case of trades in connection with a tender offer, odd-lot trading of shares or trades of shares of certain public service corporations for which the aggregate foreign ownership limit has been reached or exceeded, is reported to the Governor by the Korea Securities Depository, financial investment companies with a dealing or brokerage license or securities finance companies engaged to facilitate such transaction. A foreign investor may appoint one or more standing proxies from among the Korea Securities Depository, foreign exchange banks (including domestic branches of foreign banks), financial investment companies with a dealing, brokerage or collective investment license (including domestic branches of foreign financial investment companies) and internationally recognized custodians which will act as a standing proxy to exercise shareholders’ rights or perform any matters related to the foregoing activities if the foreign investor does not perform these activities himself. However, a foreign investor may be exempted from complying with these standing proxy rules with the approval of the Governor in cases deemed inevitable by reason of conflict between laws of Korea and those of the home country of the foreign investor.
Certificates evidencing shares of Korean companies owned by a foreign investor must be kept in custody with an eligible custodian in Korea. Only foreign exchange banks (including domestic branches of foreign banks), financial investment companies with a dealing, brokerage or collective investment license (including domestic branches of foreign financial investment companies), the Korea Securities Depository and internationally recognized custodians are eligible to act as a custodian of shares for a non-resident or foreign investor. A foreign investor must ensure that his custodian deposits its shares with the Korea Securities Depository. However, a foreign investor may be exempted from complying with this deposit requirement with the approval of the Governor in circumstances where compliance with that requirement is made impracticable, including cases where compliance would contravene the laws of the home country of such foreign investor.
Under the Investment Rules, with certain exceptions, foreign investors may acquire shares of a Korean company without being subject to any foreign investment ceiling. As one such exception, designated public service corporations are subject to a 40% ceiling on the acquisition of shares by foreigners in the aggregate. Designated public service corporations may set a ceiling on the acquisition of shares by a single foreign investor according to its articles of incorporation. Furthermore, an investment by a foreign investor of not less than 10% of the outstanding shares with voting rights and in the amount of not less than Won 100 million of a Korean company is defined as a foreign direct investment under the Foreign Investment Promotion Law, which is, in general, subject to report to, and acceptance by, the Ministry of Trade, Industry & Energy. The acquisition of shares of a Korean company by a foreign investor may also be subject to certain foreign shareholding restrictions in the event that the restrictions are prescribed in each specific law which regulates the business of the Korean company. Changes in ownership of a Korean company by a foreign direct investor, as well as changes in certain aspects of the foreign direct investment (including changes in the foreign direct investor’s name, address or business), are also subject to reporting requirements.
Under the Foreign Exchange Transaction Laws, a foreign investor who intends to acquire shares must designate a foreign exchange bank at which he must open a foreign currency account and a Won account exclusively for stock investments. No approval is required for remittance into Korea and deposit of foreign currency funds in the foreign currency account. Foreign currency funds may be transferred from the foreign currency account at the time required to place a deposit for, or settle the purchase price of, a stock purchase transaction to a Won account opened in the name of a financial investment company with a dealing, brokerage or collective investment license. Funds in the foreign currency account may be remitted abroad without any governmental approval.
Dividends on Shares are paid in Won. No governmental approval is required for foreign investors to receive dividends on, or the Won proceeds of the sale of, any shares to be paid, received and retained in Korea. Dividends paid on, and the Won proceeds of the sale of, any shares held by a
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non-resident of Korea must be deposited either in a Won account with the investor’s financial investment company with a dealing, brokerage or collective investment license or his Won account. Funds in the investor’s Won account may be transferred to his foreign currency account or withdrawn for local living expenses up to certain limitations. Funds in the Won account may also be used for future investment in shares or for payment of the subscription price of new shares obtained through the exercise of preemptive rights.
Financial investment companies with a dealing, brokerage or collective investment license are allowed to open foreign currency accounts with foreign exchange banks exclusively for accommodating foreign investors’ stock investments in Korea. Through these accounts, these financial investment companies may enter into foreign exchange transactions on a limited basis, such as conversion of foreign currency funds and Won funds, either as counterparty to or on behalf of foreign investors, without the investors having to open their own accounts with foreign exchange banks.
Item 10.E. Taxation
The following summary is based upon tax laws of the United States and Korea as in effect on the date of this Annual Report on Form 20-F, and is subject to any change in United States or Korean law that may come into effect after such date. Investors in the shares of common stock or ADSs are advised to consult their own tax advisers as to the United States, Korean or other tax consequences of the purchase, ownership and disposition of such securities, including the effect of any foreign, state or local tax laws.
Korean Taxation
The following is a summary of the principal Korean tax consequences to owners of the common shares or ADSs, as the case may be, who are non-resident individuals or non-Korean corporations without a permanent establishment in Korea to which the relevant income is attributable or with which the relevant income is effectively connected (“Non-resident Holders”). The statements regarding Korean tax laws set forth below are based on the laws in force and as interpreted by the Korean taxation authorities as of the date hereof. This summary is not exhaustive of all possible tax considerations which may apply to a particular investor and potential investors are advised to satisfy themselves as to the overall tax consequences of the acquisition, ownership and disposition of the common shares or ADSs, including specifically the tax consequences under Korean law, the laws of the jurisdiction of which they are resident, and any tax treaty between Korea and their country of residence, by consulting their own tax advisers.
Tax on Dividends
Dividends on the common shares or ADSs paid (whether in cash or in shares) to a Non-resident Holder will be subject to Korean withholding taxes at the rate of 22% (including local income tax) or such lower rate as is applicable under a treaty between Korea and such Non-resident Holder’s country of tax residence. Free distributions of shares representing a capitalization of certain capital surplus reserves may be subject to Korean withholding taxes.
The tax is withheld by the payer of the dividend. While it is the payer which is required to withhold the tax, Korean law generally entitles the person who was subject to the withholding of Korean tax to recover from the Government any part of the Korean tax withheld, upon providing evidence that it was entitled to have tax withheld at a lower rate, if certain conditions are met.
Tax on Capital Gains
As a general rule, capital gains earned by Non-resident Holders upon transfer of the common shares or ADSs are subject to Korean withholding tax at the lower of (i) 11% (including local income
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tax) of the gross proceeds realized or (ii) 22% (including local income tax) of the net realized gains (subject to the production of satisfactory evidence of the acquisition costs and certain direct transaction costs), unless exempt from Korean income taxation under the effective Korean tax treaty with the Non-resident Holder’s country of tax residence or Korean tax law.
However, a Non-resident Holder will not be subject to Korean income taxation on capital gains realized upon the sale of the common shares through the KRX KOSPI Market if the Non-resident Holder (i) has no permanent establishment in Korea and (ii) did not or has not owned (together with any shares owned by any entity with a specified special relationship with such Non-resident Holder) 25% or more of the total issued and outstanding shares of us at any time during the calendar year in which the sale occurs and during the five calendar years prior to the calendar year in which the sale occurs.
It should be noted that capital gains earned by you (regardless of whether you have a permanent establishment in Korea) from a transfer of ADSs outside Korea will generally be exempt from Korean income taxation, provided that the ADSs are deemed to have been issued overseas. If and when an owner of the underlying common shares transfers the ADSs following the conversion of the underlying shares for ADSs, such person will not be exempt from Korean income taxation.
Inheritance Tax and Gift Tax
Korean inheritance tax is imposed upon (1) all assets (wherever located) of the deceased if at the time of his death he was a tax resident of Korea and (2) all property located in Korea which passes on death (irrespective of the domicile of the deceased). Gift tax is imposed in similar circumstances to the above. The taxes are imposed if the value of the relevant property is above a certain limit and the rate varies from 10% to 50% depending on the value of the property.
Under Korean inheritance and gift tax laws, securities issued by a Korean corporation are deemed to be located in Korea irrespective of where they are physically located or by whom they are owned and consequently, the Korea inheritance and gift taxes will be imposed on transfers of the securities by inheritance or gift.
Securities Transaction Tax
Securities transaction tax is imposed on the transfer of shares issued by a Korean corporation or the right to subscribe for such shares generally at the rate of 0.35% of the sales price. In the case of the transfer of shares listed on the KRX KOSPI Market (such as the common shares), the securities transaction tax is imposed generally at the rate of (i) 0.20% of the sales price of such shares (including agricultural and fishery special surtax thereon) for transfers made on or after January 1, 2026 if traded on the KRX KOSPI Market or (ii) subject to certain exceptions, 0.35% of the sales price of such shares if traded outside the KRX KOSPI Market.
Securities transaction tax or the agricultural and fishery special surtax is not applicable if (i) the shares or rights to subscribe for shares are listed on a designated foreign stock exchange and (ii) the sale of the shares takes place on such exchange.
Securities transaction tax, if applicable, must be paid by the transferor of the shares or rights, in principle. When the transfer is effected through a securities settlement company, such settlement company is generally required to withhold and pay (to the tax authority) the tax, and when such transfer is made through a financial investment company with a brokerage license only, such company is required to withhold and pay the tax. Where the transfer is effected by a Non-resident Holder without a permanent establishment in Korea, other than through a securities settlement company or a financial investment company with a brokerage license, the transferee is required to withhold the securities transaction tax. Failure to do so will result in the imposition of penalties equal to the sum of (i) between 10% to 40% of the tax amount due, depending on the nature of the improper reporting, and (ii) 8.03% per annum on the tax amount due for the default period.
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Tax Treaties
Currently, Korea has income tax treaties with a number of countries, including, inter alia, Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Italy, Japan, Luxembourg, Ireland, the Netherlands, New Zealand, Norway, Singapore, Sweden, Switzerland, the United Kingdom and the United States of America, under which the rate of withholding tax on dividend and interest is reduced, generally to between 5% and 16.5% (including local income tax), and the tax on capital gains derived by a non-resident from the transfer of securities issued by a Korean company is often eliminated.
Each Non-resident Holder of common shares should inquire for itself whether it is entitled to the benefits of a tax treaty with Korea. It is the responsibility of the party claiming the benefits of a tax treaty in respect of interest, dividend, capital gains or “other income” to submit to us (or our agent), the purchaser or the financial investment company with a brokerage license, as the case may be, prior to or at the time of payment, such evidence of tax residence of the party claiming the treaty benefit as the Korean tax authorities may require in support of its claim for treaty protection. In the absence of sufficient proof, we (or our agent), the purchaser or the financial investment company with a brokerage license, as the case may be, must withhold tax at the normal rates.
In order for a Non-resident Holder to obtain the benefit of a tax exemption on certain Korean source income (e.g., interest and capital gains) under an applicable tax treaty, Korean tax law requires such Non-resident Holder (or its agent) to submit to the payer of such Korean source income an application for tax exemption under a tax treaty along with a certificate of tax residency of such Non-resident Holder issued by a competent authority of the non-resident’s country of tax residence, subject to certain exceptions. The payer of such Korean source income, in turn, is required to submit such application to the relevant district tax office by the ninth day of the month following the date of the first payment of such income. However, this requirement does not apply to exemptions under Korean tax law.
For a non-resident of Korea to obtain the benefits of treaty-reduced tax rates on certain Korean source income (e.g., capital gains and interest) under an applicable tax treaty, Korean tax law requires such non-resident (or its agents) to submit to the payer of such Korean source income an application for treaty-reduced tax rates prior to receipt of such Korean source income; provided, however, that an owner of ADSs who is a non-resident of Korea is not required to submit such application, if the Korean source income on the ADSs is paid through an account opened at the Korea Securities Depository by a foreign depository. The payer of such Korean source income, in turn, is required to submit such application to the relevant district by the end of February of the year following the date of payment of such income (or, in the case of a temporary suspension or permanent closure of business, by the end of the month following the second month after the month in which such suspension or closure occurs).
If Korean source income is paid to a non-resident through an overseas investment vehicle, such investment vehicle must obtain an application for tax exemption or reduced tax rates from each non-resident, who is the beneficial owner of such investment vehicle and submit to the payer of such Korean source incomes an overseas investment vehicle report, together with the applications for tax exemptions or reduced tax rates prepared by the non-resident beneficial owner. An overseas investment vehicle means an organization established outside of Korea that manages funds collected through investment solicitation by way of acquiring, disposing, or otherwise investing in investment targets and then distributes the outcome of such management to investors. An application for tax exemption or reduced tax rates submitted by the non-resident remains effective for three years from submission, and if any material changes occur with respect to information provided in the application, an application reflecting such change must be newly submitted.
At present, Korea has not entered into any tax treaty relating to inheritance or gift tax.
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United States Taxation
This summary describes the material U.S. federal income tax consequences for a U.S. holder (as defined below) of owning our shares of common stock or ADSs. This summary applies to you only if you hold shares of common stock or ADSs as capital assets for tax purposes. This summary does not apply to you if you are a member of a class of holders subject to special rules, such as:
a dealer in securities or currencies;
a trader in securities that elects to use a mark-to-market method of accounting for your securities holdings;
a bank;
a life insurance company;
a tax-exempt organization;
a person that holds shares of common stock or ADSs that are a hedge or that are hedged against interest rate or currency risks;
a person that holds shares of common stock or ADSs as part of a straddle or conversion transaction for tax purposes;
a person whose functional currency for tax purposes is not the U.S. dollar;
a person that owns or is deemed to own 10% or more of any class of our stock or 10% or more of the combined voting power or value of all of our classes of stock; or
an entity treated as a partnership for U.S. federal income tax purposes that holds shares of common stock or ADSs, or an investor therein.
This summary is based on laws, treaties and regulatory interpretations in effect on the date hereof, all of which are subject to change, possibly on a retroactive basis.
Please consult your own tax advisers concerning the U.S. federal, state, local and other foreign tax consequences of purchasing, owning and disposing of shares of common stock or ADSs in your particular circumstances.
For purposes of this summary, a “U.S. holder” is a beneficial owner of a share of common stock or ADS that is:
a citizen or resident of the United States;
a U.S. domestic corporation; or
otherwise subject to U.S. federal income tax on a net income basis with respect to income from the shares of common stock or ADS.
Shares of Common Stock and ADSs
In general, if you are the beneficial owner of ADSs, you will be treated as the beneficial owner of the shares of common stock represented by those ADSs for U.S. federal income tax purposes, and no gain or loss will be recognized if you exchange an ADS for the shares of common stock represented by that ADS.
Passive Foreign Investment Company Rules
Special U.S. tax rules apply to investors in companies that are considered to be PFICs. We will be classified as a PFIC in a particular taxable year if either
75 percent or more of our gross income for the taxable year is passive income; or
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at least 50 percent of the value of our assets (generally determined on the basis of a quarterly average) is attributable to assets that produce or are held for the production of passive income.
For this purpose, passive income generally includes dividends, interest, gains from certain commodities transactions, rents, royalties and the excess of gains over losses from the disposition of assets that produce passive income.
Based on our financial statements and relevant market and shareholder data, we believe that we were not treated as a PFIC for U.S. federal income tax purposes with respect to our 2024 or 2025 taxable years. In addition, based on our current expectations regarding the value and nature of our assets, the sources and nature of our income, and relevant market and shareholder data, we do not expect to be a PFIC for our 2026 taxable year or in the foreseeable future. However, the determination of whether we are a PFIC must be made annually based on the facts and circumstances at that time, some of which may be beyond our control, including the valuation of our assets as implied by the market price for our common stock or ADSs. Accordingly, we could be classified as a PFIC in the current or a future taxable year, and that possibility may be increased significantly by market volatility or a decline in the price of our common stock or ADSs.
If we are classified as a PFIC in any taxable year during which you hold our common stock or ADSs, you could be subject to a special tax at ordinary income rates on “excess distributions,” including certain distributions by us and gain that you recognize on the sale of your common stock or ADSs. The amount of income tax on any excess distributions will be increased by an interest charge to compensate for tax deferral, calculated as if the excess distributions were earned ratably over the period you held the common stock or ADSs. Classification as a PFIC may also have other adverse consequences, including, in the case of individuals, the denial of a step-up in the basis of your common stock or ADSs at death. Except where otherwise noted, the remainder of this summary assumes that we were not a PFIC for our 2025 taxable year and that we will not become a PFIC in the current or any future year.
You should consult your own tax advisers as to our status as a PFIC and the tax consequences to you of such status.
The gross amount of cash dividends that you receive (prior to deduction of Korean taxes) generally will be subject to U.S. federal income taxation as foreign source dividend income. Dividends paid in Won will be included in your income in a U.S. dollar amount calculated by reference to the exchange rate in effect on the date of your (or, in the case of ADSs, the depositary’s) receipt of the dividend, regardless of whether the payment is in fact converted into U.S. dollars. If such a dividend is converted into U.S. dollars on the date of receipt, you generally should not be required to recognize foreign currency gain or loss in respect of the dividend income. U.S. holders should consult their own tax advisers regarding the treatment of any foreign currency gain or loss on any Won received by U.S. holders that are converted into U.S. dollars on a date subsequent to receipt.
The U.S. dollar amount of dividends received by an individual U.S. holder with respect to the ADSs and common stock will be subject to taxation at a preferential rate applicable to long-term capital gains if the dividends are “qualified dividends.” Subject to certain exceptions for short-term and hedged positions, dividends paid on the ADSs and common stock will be treated as qualified dividends if (i) we are eligible for the benefits of a comprehensive income tax treaty with the United States that the U.S. Internal Revenue Service (“IRS”) has approved for the purposes of the qualified dividend rules and (ii) we were not, in the year prior to the year in which the dividend is paid, and are not, in the year in which the dividend is paid, a PFIC. The income tax treaty between Korea and the United States (“Treaty”) has been approved for the purposes of the qualified dividend rules, and we believe we are eligible for benefits under the Treaty. Based on our audited financial statements and relevant market and shareholder data, we believe that we were not treated as a PFIC for U.S. federal income tax
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purposes with respect to our 2024 or 2025 taxable years. In addition, based on our current expectations regarding the value and nature of our assets, the sources and nature of our income, and relevant market and shareholder data, we do not expect to be a PFIC for our 2026 taxable year. You should consult your own tax advisers regarding the availability of the reduced dividend tax rate in the light of your own particular circumstances.
Distributions of additional shares in respect of shares of common stock or ADSs that are made as part of a pro-rata distribution to all of our shareholders generally will not be subject to U.S. federal income tax.
Sales and Other Dispositions
For U.S. federal income tax purposes, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of common stock or ADSs equal to the difference, if any, between the amount realized on the sale or exchange and your adjusted tax basis in the common stock or ADSs. Any gain or loss realized by a U.S. holder on the sale or other disposition of common stock or ADSs generally will be treated as U.S. source income or loss for U.S. foreign tax credit purposes. Subject to the discussion above under “Passive Foreign Investment Company Rules,” this gain or loss will be capital gain or loss, and will be long-term capital gain or loss to the extent that the shares of common stock or ADSs sold or disposed of were held for more than one year. Your ability to offset capital losses against ordinary income is limited. Long-term capital gain recognized by an individual U.S. holder generally is subject to taxation at a reduced rate.
Foreign Tax Credit Considerations
Subject to generally applicable limitations and conditions, Korean dividend or capital gains withholding tax paid at the appropriate rate applicable to you may be eligible for a credit against your U.S. federal income tax liability. These generally applicable limitations and conditions include requirements adopted by the IRS in regulations promulgated in December 2021 and any Korean tax will need to satisfy these requirements in order to be eligible to be a creditable tax for a U.S. holder. In the case of a U.S. holder that consistently elects to apply a modified version of these rules under temporary guidance and complies with specific requirements set forth in such guidance, the Korean tax on dividends or gains will be treated as meeting the requirements and therefore as a creditable tax. In the case of all other U.S. holders, the application of these requirements to the Korean tax on dividends or gains is uncertain and we have not determined whether these requirements are met, including requirements applicable to the Treaty. If the Korean dividend or capital gains tax is not a creditable tax for a U.S. holder or you do not elect to claim a foreign tax credit for any foreign income taxes paid or accrued in the same taxable year, you may be able to deduct the Korean tax in computing your taxable income for U.S. federal income tax purposes.
Dividends will constitute income from sources without the United States and, if the withholding tax is a creditable tax for a U.S. holder that elects to claim foreign tax credits, generally will constitute “passive category income” for foreign tax credit purposes. Capital gain or loss recognized by a U.S. holder on the sale or other disposition of the shares of common stock or ADSs generally will be U.S. source gain or loss for U.S. foreign tax credit purposes. Consequently, even if any withholding tax on gains qualifies as a creditable tax, you may not be able to credit the tax against your U.S. federal income tax liability unless such credit can be applied (subject to generally applicable conditions and limitations) against tax due on other income treated as derived from foreign sources. If the Korean tax is not a creditable tax, the tax would reduce the amount realized on the sale or other disposition of the shares of common stock or ADSs even if you have elected to claim a foreign tax credit for other taxes in the same year.
Any Korean securities transaction tax or agriculture and fishery special tax that you pay will not be creditable for foreign tax credit purposes.
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The availability and calculation of foreign tax credits and deductions for foreign taxes depend upon a U.S. holder’s particular circumstances and involve the application of complex rules to those circumstances. The temporary guidance discussed above also indicates that the Treasury and the IRS are considering proposing amendments to the December 2021 regulations and that the temporary guidance can be relied upon until additional guidance is issued that withdraws the temporary guidance. You should consult your own tax advisors regarding the application of these rules to your particular situation.
Specified Foreign Financial Assets
Certain U.S. holders that own “specified foreign financial assets” with an aggregate value in excess of US$50,000 on the last day of the taxable year or US$75,000 at any time during the taxable year are generally required to file an information statement along with their tax returns, currently on Form 8938, with respect to such assets. “Specified foreign financial assets” include any financial accounts held at a non-U.S. financial institution, as well as securities issued by a non-U.S. issuer (which would include the common stock or ADSs) that are not held in accounts maintained by financial institutions. Higher reporting thresholds apply to certain individuals living abroad and to certain married individuals. Regulations extend this reporting requirement to certain entities that are treated as formed or availed of to hold direct or indirect interests in specified foreign financial assets based on certain objective criteria. U.S. holders who fail to report the required information could be subject to substantial penalties. In addition, the statute of limitations for assessment of tax would be suspended, in whole or part. Prospective investors should consult their own tax advisors concerning the application of these rules to their investment in the common stock or ADSs, including the application of the rules to their particular circumstances.
U.S. Information Reporting and Backup Withholding Rules
Payments in respect of shares of common stock or ADSs that are made within the United States or through certain U.S.-related financial intermediaries are subject to information reporting and may be subject to backup withholding unless you provide an accurate taxpayer identification number and make any other required certification or otherwise establish an exemption. Holders that are not “United States persons” (as defined in the U.S. Internal Revenue Code of 1986, as amended) generally are not subject to information reporting or backup withholding. However, such a holder may be required to provide a certification of its non-U.S. status in connection with payments received within the United States or through a U.S.-related financial intermediary.
Item 10.F. Dividends and Paying Agents
See “Item 8.A. Consolidated Statements and Other Financial Information — Dividends” above for information concerning our dividend policies and our payment of dividends. See “Item 10.B. Memorandum and Articles of Association — Dividends” for a discussion of the process by which dividends are paid on shares of our common stock. The paying agent for payment of our dividends on ADSs in the United States is the Citibank, N.A.
Item 10.G. Statements by Experts
Item 10.H. Documents on Display
We file reports, including annual reports on Form 20-F, and other information with the SEC pursuant to the rules and regulations of the SEC that apply to foreign private issuers. You may read and copy any materials filed with the SEC at the Public Reference Rooms in Washington, D.C. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Any filings we make electronically will be available to the public over the Internet at the SEC’s website at http://www.sec.gov.
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Item 10.I. Subsidiary Information
Item 10.J. Annual Report to Security Holders
Item 11. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to foreign exchange rate and interest rate risk primarily associated with underlying liabilities, and to changes in the commodity prices of principal raw materials. Following evaluation of these positions, we selectively enter into derivative financial instruments to manage the related risk exposures, primarily with respect to foreign exchange rate and interest rate risks, which are entered into with major financial institutions in order to minimize the risk of credit loss. Our market risk management policy determines the market risk tolerance level, measuring period, controlling responsibilities, management procedures, hedging period and hedging ratio very specifically. We also prohibit all speculative hedging transactions and evaluate and manage foreign exchange exposures to receivables and payables.
None of our loss exposures related to derivative contracts are unlimited, and we do not believe that our net derivative positions could result in a material loss to our profit before income tax or total equity due to significant fluctuations of major currencies against the Korean Won. Due to the nature of our derivative contracts primarily as hedging instruments that manage foreign exchange risks, net gain or net loss on derivatives transactions and valuation of derivatives are typically offset by net loss or net gain on foreign currency transaction and translation. We recognized net gain on valuation of derivatives of Won 124 billion and net gain on derivatives transactions of Won 13 billion in 2023, net gain on valuations of derivatives of Won 790 billion and net gain on derivatives transactions of Won 120 billion in 2024 and net gain on valuations of derivatives of Won 80 billion and net loss on derivatives transactions of Won 137 billion in 2025.
Exchange Rate Risk
Korea is our most important market and, therefore, a substantial portion of our cash flow is denominated in Won. Most of our exports are denominated in U.S. dollars. Japan is also an important market for us, and we derive significant cash flow denominated in Yen. We are exposed to foreign exchange risk related to foreign currency-denominated liabilities and anticipated foreign exchange payments. Anticipated foreign exchange payments, which represent a substantial amount and are mostly denominated in U.S. dollars, relate primarily to imported raw material costs and freight costs. Foreign currency-denominated liabilities relate primarily to foreign currency-denominated debt.
We strive to naturally offset our foreign exchange risk by matching foreign currency receivables with our foreign currency payables and our overseas subsidiaries have sought to further mitigate the adverse impact of exchange rate fluctuations by conducting business transactions in the local currency of the respective market in which the transactions occur. In particular, POSCO INTERNATIONAL’s exposure to fluctuations in exchange rates, including the Won/U.S. dollar exchange rate, is limited because trading transactions typically involve matched purchase and sale contracts, which result in limited settlement exposure, and because POSCO INTERNATIONAL’s contracts with domestic suppliers of products for export and with domestic purchasers of imported products are generally denominated in U.S. dollars. Although the impact of exchange rate fluctuations is partially mitigated by such strategies, we and our subsidiaries, particularly POSCO INTERNATIONAL and POSCO E&C, also periodically enter into derivative contracts, primarily foreign currency swaps and forward exchange contracts, to further hedge some of our foreign exchange risks.
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Our foreign currency exposure and changes in gain or loss resulting from a 10% foreign exchange rate change against the Korean Won are as follows:
U.S. dollars
Euro
Japanese Yen
See Note 23 to the Consolidated Financial Statements.
Interest Rate Risk
We are also subject to market risk exposure arising from changing interest rates. In particular, we are exposed to interest rate risk on our existing floating rate borrowings and on additional debt financings that we may periodically undertake for various reasons, including capital expenditures and refinancing of our existing borrowings. A rise in interest rates will increase the cost of our existing variable rate borrowings. If interest rates on borrowings with floating rates had been 1% higher or lower with all other variables held constant, the impact on the gain or loss of the applicable period would be as follows:
Increase or decrease in profit and equity
A reduction of interest rates also increases the fair value of our debt portfolio, which is primarily of a fixed interest nature. From time to time, we use, to a limited extent, interest rate swaps to reduce interest rate volatility on some of our debt and manage our interest expense by achieving a balanced mixture of floating and fixed rate debt.
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The following table summarizes the carrying amounts, fair values, principal cash flows by maturity date and weighted average interest rates of our short-term and long-term liabilities as of December 31, 2025 which are sensitive to exchange rates and/or interest rates. The information is presented in Won, which is our reporting currency.
Local currency:
Fixed rate
Average weighted rate (1) .
Variable rate
Average weighted rate (1)
Foreign currency, principally U.S. dollars and Yen:
Weighted average rates of the portfolio at the period end.
Item 12. Description of Securities Other than Equity Securities
Item 12.A. Debt Securities
Item 12.B. Warrants and Rights
Item 12.C. Other Securities
Item 12.D. American Depositary Shares
Fees and Charges
We switched our depositary from The Bank of New York Mellon to Citibank, N.A. in July 2013. Holders of our ADSs are required to pay the following service fees to the depositary:
Services
Fees
Issuance of ADSs upon deposit of shares
Delivery of deposited shares against surrender of ADSs
Distributions of cash dividends or other cash distributions
Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) exercise of rights to purchase additional ADSs
Distribution of securities other than ADSs or rights to purchase additional ADSs
General depositary services
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Holders of our ADSs are also responsible for paying certain fees and expenses incurred by the depositary such as:
fees for the transfer and registration of shares charged by the registrar and transfer agent for the shares in Korea (i.e., upon deposit and withdrawal of shares);
expenses incurred for converting foreign currency into U.S. dollars;
expenses for cable, telex and fax transmissions and for delivery of securities;
taxes (including applicable interest and penalties) and other governmental charges;
fees and expenses incurred in connection with compliance with exchange control regulations and other regulatory requirements; and
fees and expenses incurred in connection with the delivery or servicing of shares on deposit.
Depositary fees payable upon the issuance and surrender of ADSs are typically paid to the depositary by the brokers (on behalf of their clients) receiving the newly issued ADSs from the depositary and by the brokers (on behalf of their clients) delivering the ADSs to the depositary for surrender. The brokers in turn charge these fees to their clients. Depositary fees payable in connection with distributions of cash or securities to ADS holders and the depositary services fee are charged by the depositary to the holders of record of ADSs as of the applicable ADS record date.
The depositary fees payable for cash distributions are generally deducted from the cash being distributed. In the case of distributions other than cash (i.e., stock dividend, rights), the depositary charges the applicable fee to the ADS record date holders concurrent with the distribution. In the case of ADSs registered in the name of the investor (whether certificated or uncertificated in direct registration), the depositary sends invoices to the applicable record date ADS holders. In the case of ADSs held in brokerage and custodian accounts (via the Korea Securities Depository, or KSD), the depositary generally collects its fees through the systems provided by KSD (whose nominee is the registered holder of the ADSs held in KSD) from the brokers and custodians holding ADSs in their KSD accounts. The brokers and custodians who hold their clients’ ADSs in KSD accounts in turn charge their clients’ accounts the amount of the fees paid to the depositary.
In the event of refusal to pay the depositary fees, the depositary may, under the terms of the deposit agreement, refuse the requested service until payment is received or may set off the amount of the depositary fees from any distribution to be made to such holder of ADSs.
The fees and charges that holders of our ADSs may be required to pay may vary over time and may be changed by us and by the depositary. Holders of our ADSs will receive prior notice of such changes.
Fees and Payments from the Depositary to Us
In 2025, we received approximately $1.0 million from the depositary for reimbursement of various costs, including preparation of SEC filing and submission, listing fees, proxy process expenses (printing, postage and distribution), legal fees and contributions for our investor relations activities.
In addition, as part of its service to us, the depositary waives its fees for the standard costs associated with the administration of the ADS facility, associated operating expenses, investor relations advice and access to an internet-based tool used in our investor relations activities.
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PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
Item 15. Controls and Procedures
a. Disclosure Controls and Procedures
Our management has evaluated, with the participation of our chief executive officer and chief financial officer, the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of December 31, 2025. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon our evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report. Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and that it is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
b. Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed by, and under the supervision of, our principal executive, principal operating and principal financial officers, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles.
Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our consolidated financial statements would be prevented or detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management has completed an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2025 based on criteria in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
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Commission. Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2025.
c. Report of the Independent Registered Public Accounting Firm
The report of our independent registered public accounting firm, EY Han Young (formerly, Ernst & Young Han Young), on the effectiveness of our internal control over financial reporting as of December 31, 2025 is included in Item 18 of this Annual Report on Form 20-F.
d. Changes in Internal Control Over Financial Reporting
There has been no change in our internal control over financial reporting that occurred during the year covered by this Annual Report on Form 20-F that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Our adoption of Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission did not have, and is not reasonably likely to have, any material effect on our internal control over financial reporting.
Item 16. [Reserved]
Item 16.A. Audit Committee Financial Expert
The board of directors has determined that Sohn, Sung Kyu is an audit committee financial expert and is independent within the meaning of applicable SEC rules.
Item 16.B. Code of Ethics
We have adopted a code of business conduct and ethics, as defined in Item 16B. of Form 20-F under the Securities Exchange Act of 1934, as amended. Our code of business conduct and ethics, called Code of Ethics, applies to our chief executive officer and chief financial officer, as well as to our directors, other officers and employees. Our Code of Ethics is available on our website at http://www.posco-inc.com. If we amend the provisions of our Code of Ethics that apply to our chief executive officer or chief financial officer and persons performing similar functions, or if we grant any waiver of such provisions, we will disclose such amendment or waiver on our website at the same address.
Item 16.C. Principal Accountant Fees and Services
Our independent registered public accounting firm for the fiscal years ending December 31, 2024 and 2025 was EY Han Young and the auditor location is Seoul, Republic of Korea, and the auditor firm ID is 1437. Our independent registered public accounting firm for the fiscal year ending December 31, 2023 was KPMG Samjong Accounting Corp. and their location is Seoul, Republic of Korea, and their firm ID is 1357.
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Audit and Non-Audit Fees
The following table sets forth the fees billed to us by our independent registered public accounting firm, EY Han Young and its affiliates during the fiscal years ended December 31, 2024 and 2025:
Audit fees (1)
Tax fees (2)
Other fees (3)
Total fees
Audit fees consist of fees related to the audit of our annual financial statements and the annual financial statements of other related companies and review of interim financial statements.
Tax fees consist of fees related to our tax compliance and tax planning, as well as compliance related to transfer pricing.
Other fees consist of fees related to statutory audits unrelated to the audit of our annual financial statements.
Audit Committee Pre-Approval Policies and Procedures
Under our Audit Committee’s pre-approval policies and procedures, all audit and non-audit services to be provided to us by an independent registered public accounting firm must be pre-approved by our Audit Committee. Our Audit Committee does not pre-approve any audit and non-audit services that are prohibited from being provided to us by an independent registered public accounting firm under the rules of SEC and applicable law.
Item 16.D. Exemptions from the Listing Standards for Audit Committees
Item 16.E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
The following table sets forth the repurchases of common shares by us or any affiliated purchasers during 2025:
Period
January 1 to January 31
February 1 to February 28
March 1 to March 31
April 1 to April 30
May 1 to May 31
June 1 to June 30
July 1 to July 31
August 1 to August 31
September 1 to September 30
October 1 to October 31
November 1 to November 30
December 1 to December 31
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Item 16.F. Change in Registrant’s Certifying Accountant
Item 16.G. Corporate Governance
Pursuant to the rules of the New York Stock Exchange applicable to foreign private issuers like us that are listed on the New York Stock Exchange, we are required to disclose significant differences between the New York Stock Exchange’s corporate governance standards and those that we follow under Korean law and in accordance with our own internal procedures. The following is a summary of such significant differences.
NYSE Corporate Governance Standards
POSCO HOLDINGS INC.’s Corporate GovernancePractice
Our articles of incorporation provide that our board of directors must comprise no less than a majority of Outside Directors. Our Outside Directors must meet the criteria for outside directorship set forth under the Korean Commercial Act and Korean Financial Investment Services and Capital Markets Act.
The majority of our board of directors is independent (as defined in accordance with the New York Stock Exchange’s standards), and seven out of 12 directors are Outside Directors. Under our articles of incorporation, we may have up to five Inside Directors and eight Outside Directors.
A compensation committee of independent directors is required. The committee must have a charter that addresses the purpose, responsibilities and annual performance evaluation of the committee. The charter must be made available on the company’s website. In addition, in accordance with the U.S. Securities and Exchange Commission rules adopted pursuant to Section 952 of the Dodd-Frank Act, the New York Stock Exchange listing standards were amended to expand the factors relevant in determining whether a committee member has a relationship with the company that will materially affect that member’s duties to the compensation committee.
Additionally, the committee may obtain or retain the advice of a compensation adviser only after taking into consideration all factors relevant to determining that adviser’s independence from management.
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Item 16.H. Mine Safety Disclosure
Item 16.I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
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PART III
Item 17. Financial Statements
Item 18. Financial Statements
Report of Independent Registered Public Accounting Firm, EY Han Young, on Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm, EY Han Young, on Internal Control over Financial Reporting
Report of Independent Registered Public Accounting Firm, KPMG Samjong Accounting Corp., on Consolidated Financial Statements
Consolidated Statements of Financial Position as of December 31, 2024 and 2025
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2023, 2024 and 2025
Consolidated Statements of Changes in Equity for the Years Ended December 31, 2023, 2024 and 2025
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2024 and 2025
Notes to the Consolidated Financial Statements
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Exhibits
1.1
2.1
2.2
2.3
2.4
8.1
12.1
12.2
13.1
16.1
97.1
101.INS
101.SCH
Filed previously
Paper filing
119
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
POSCO HOLDINGS INC.
(Registrant)
/s/ Chang, In Hwa
Name:
Title:
Date: