Greetings. I head up the Finance and IR Division at POSCO Holdings. My name is Kim Seung-Jun. This is POSCO Holdings 2025 Full Year Earnings Release. I'd like to welcome the participants, investors and analysts. Thank you. In 2025, we experienced global trade policy shifts and economic slowdown. It was a challenging environment. We put our effort into protecting our short-term profits. At the same time, as a business group, we built the foundation for future growth. 2025 consolidated revenues declined 5% year-on-year, recording KRW 69.1 trillion. Operating profit declined 16% to KRW 1.8 trillion. While POSCO's OP grew from 3.9% to 5%, we failed to meet our goals due to the accidents at POSCO E&C that led to construction halt as well as the ramp-up costs that entered the books for the new lithium and precursor plants that were commissioned at the end of 2024. The fourth quarter profits were especially weak. The reason was communicated in last quarter's release. Pohang HR plant and other facilities have gone into major repair schedules, triggering production volume cuts. Also, large volume imports that flooded our market prior to the preliminary AD tariffs on HR products were still being consumed, causing a temporary drop in sales volume. There's more, the divestment of PZSS plant in China caused employee compensation to enter our books, too. This is in addition to the loss incurred by construction stop issued at POSCO E&C. So sizable onetime costs were accounted for all at once. In 2026, we will likely serve out some significant inflection points for POSCO Holdings. First, we have, for some time, studied various ways to go overseas in steel. This year, we'll see some specific actions. Last year, we identified strategic partners, signed MOUs with the U.S. and Indian JV partners to begin negotiations.…

Page 3. 2025 consolidated OP decreased KRW 347 billion year-on-year, recording KRW 1.8 trillion with consolidated EBITDA of KRW 5.9 trillion. POSCO's OP grew -- from quarter 1 to quarter 3, quarterly OP was on the rise with a slight decline in quarter 4 to KRW 12.7 billion. First, POSCO E&C had construction stoppage and bad debt expenses recording KRW 190 billion of quarterly deficit. Second, PZSS divestment is ongoing and employee compensation and other temporary costs were administered, deficit totaling KRW 131.9 billion. In end of December, Chinese merger approval was completed and the sale will be completed within Q1. Third, POSCO's OP recorded KRW 337 billion, decreasing from Q3. Off-season is one factor, but another factor is stockpiling of cheap imports prior to the hot-rolled AD measures. And we decreased our sales volume by 6% quarter-on-quarter. Also, Pohang hot rolling line is under major maintenance, so production was adjusted by 4%. With these efforts, market inventory of low-priced imports are balancing out. And from quarter 1, we expect production and sales volume to return to previous levels. In 2026, as our CFO mentioned, restructuring of businesses in the red will show the impact and Argentina Lithium Phase 1 will begin commercial production, and we can expect RBM profits to improve. Last year, we acquired a palm farm, expanded capacity of Australia Senex gas fields and these new investments will also contribute to profits. Page 4. This year, group-wide serious injury cases increased to 9. POSCO Group is enhancing safety systems, increasing employee participation and boosting operability on the ground as priority goals, focusing our best efforts to foster a safe workplace. Last year, we established the group Safety Innovation TF team as CEO direct report and launched POSCO safety solution to strengthen safety expertise. Furthermore, we applied world-class…

[Operator Instructions] The first question is from Hyundai Motor Securities, Mr. Park Hyun-Wook.

My name is Park. According to your presentation, POSCO's performance is looking pretty good this year. I have 3 questions. The first one is regarding the steel market outlook. In the first half in automotive and shipbuilding, major demand industries, what are some of the negotiations that you're looking forward to? What do you expect? And some of the Japanese and Chinese HR products have posed some challenges last year and some of the impact of those products will manifest in the first half of this year. So when will we begin to see POSCO's market share increase? Secondly, lithium prices have been rising significantly. So it's about $18,000. How do you forecast the lithium prices for the rest of this year? And based on current price levels, Argentina salt lake as well as hard rock lithium, what do you think about their prospects? And this year, I think some of the construction is continuing. Currently, when can we expect to hit BEP? Third question. You have invested as POSCO Holdings in lithium mines. You're also investing in India and North America. So there are a lot of sizable investments being made. But I think there's still lingering concern about HMM acquisition in the market. So we are watching this. We'd be really curious to hear what your position is? That's all of my questions.

My name is [indiscernible] Marketing Strategy Officer at POSCO. So in the demand industry such as automotive and shipbuilding, you asked about the market outlook. Here's my answer. The steel market this year, first on global steel market, we'll see some appeasement from China. And because of some of the other expansion plans, I think we'll see some improvement, but we'll see some differences by region. In China, real estate market is still in a recession. So this year, steel demand is likely to continue to decrease. So they will experience a negative growth. But in Europe and the United States, they have already hit their base point. So we believe that they will be recovering. But because of the policy uncertainties, whether demand will actually increase that we'll have to wait and see. In the emerging economies in India and the ASEAN countries, we will see some strong demand increases. In India, in particular, because they're increasing manufacturing as well as infrastructure building, I think we'll see strong growth signals in '26 as well. In domestic market, we'll see some disparities by industry as well. In shipbuilding and defense as well as power industries, we'll see some strong growth continue. But in home electronics and construction, we will continue to experience recession. In automobiles, tariffs and some of the sharp demand decreases will continue to pose challenges on them. And so there will be a little bit more -- there will have to be a little bit more time before we can see recovery. On price negotiations with the auto OEMs, since last year, tariffs have become an issue. So against the negotiation formula, they are asking for additional discounts. We are going to try to stick to the formula as much as possible. For shipbuilding companies, because they have a stable supply of orders and because they are trying to dominate or take a larger share of the market, we will take that into consideration when we negotiate with them. For the hot-rolled AD tariffs, what kind of impact can we expect was your question, I believe. I believe the flat products have seen a decrease of about 300,000 tonnes in the fourth quarter against the third quarter of last year. But we believe that the flooding of these products into our market has come to an end. And by March or April, we'll be increasing our selling prices. And the impact of these raised prices will begin to see them in the second quarter and beyond. So we'll continue to make these kinds of efforts.

My name is [indiscernible], Energy Materials Business Management Office. On lithium price, IBs have refrained from publishing prices. But one has forecast $20. So it will be similar to the current price. And Chinese inventory, it's not increasing. So to -- this price doesn't reflect an effort to increase that inventory. It's actually reflecting actual demand. So for about 2 years, lithium prices have fluctuated. And so we went through a pretty harsh cycle. I think the lowest point was in 2018, and then we saw it go up continuously. So in -- sorry, in '18, we hit a high point and then it began to fall. And then it began to rise again for about 2 years. And took that up to about $80. And by the end of last year, we saw those prices drop. And so this rise is only about 3 months old. So based on past lessons, I think we will see it continue to rise. We have to be very careful here. We have past lessons to reflect on. But I think very gingerly, I make the forecast that we will see it rise. In Gwangyang and Argentina, we were deep into ramp-up in both locations. So no profits there. But we will go into commercial production this year, in particular, in Argentina, in January and February, we had some issues. The membrane component was in short supply. So in January and February, our volume did not hit our goal. And because we will be shipping out orders, filling orders for which we offered a lower price, that will not be generating too much profit either. So because of the component that was in short supply and because we're still delivering on low-priced agreements, we will not be generating profit anytime soon. But as…

The next question will be from iM Securities, Kim Yoon Sang.

I am Kim Yoon Sang from iM Securities. I have a few questions for you. The first question I'd like to ask is regarding steel and also infrastructure, POSCO International and E&C and [ bisector ], I would like to ask about the business plan. And specifically, what kind of market situation you are referring to? And the second question is it more detailed questions about your business plans in RBM. There are some parts, for example, canceling of orders and difficulties with the hard rock lithium -- compared to this year, do you expect things to improve this year? I would like to ask -- I would like you to specify. And for the third question, you provided more than KRW 6 trillion in terms of CapEx. And I wonder if this needs to be adjusted downward. And finally, Cleveland-Cliffs, you mentioned partnerships. And recently, the strategic investment, are there any considerations that you're making?

I will answer the second question first. What will improve is the lithium price increase and the negative factors are maintaining the North American customers, but the orders have been on the decline. So we are currently exploring other customers. And spodumene prices are also factors that are on the negative. But whether or not this will lead to improvements will depend on our operating profit, and we expect things to improve greatly compared to the previous year. Especially POSCO Argentina is expected to perform very well and the operating profits to improve sizably. You've also asked about the profit guidance. I would like to mention a few things. In steel, we expect POSCO to do a bit better than last year because there are a few factors. Exports are -- can be a little bit challenging, but the domestic market is improving. So compared to the overall operating profit in the previous year, we expect it to improve. In overseas steel compared to last year, around KRW 200 billion of deficit will be taken out because PZSS will be excluded. So we expect it to improve as well. In infrastructure, compared to last year, there are 2 factors that we would like to ask you to consider. First is the acquisition of palm oil, more than KRW 100 billion of profit occurs from the palm firm. And the effect of the investment -- so the incremental profits may drop a little bit below KRW 100 billion. And then we had KRW 540 billion in losses in construction, but we are hoping to see about KRW 100 billion profit this year. So the size of the profit that will gain in infrastructure should be meaningful in rechargeable battery materials. Lithium price fluctuations define a lot of our business, but the…

I am [indiscernible] from Corporate Strategy Office. Third question regarding the rare earth and other considerations with Cleveland-Cliffs. We are cooperating with Cleveland-Cliffs focusing on steel. So Cleveland-Cliff at the last IR, they announced -- they made announcements regarding rare earth. Regarding rare earth cooperation, we have not made any reviews.

Next question is from HSBC, Park Yushin.

This is Park Yushin at HSBC. I have 2 questions. The first one is on lithium business. U.S. automotive OEMs are electrifying. So POSCO's lithium business, are there some target clients in the U.S. as well as the business targets in the lithium business for the U.S. market? Next is on steel. This Saturday, I believe there were some proposals made by BlueScope and NSC was involved. If you have any updates on this, I'd like to hear some more. And any strategies regarding the steel business you can share?

On the automotive OEMs, yes, there is a slowdown in electrification in the U.S. This year, LFP will see about a 30% increase. NCM will likely stay. So in terms of client base for cathodes and Pilbara Lithium Solution because their client base is mostly predominantly in the U.S., we are trying to make a shift to Europe. So we are deeply involved in the marketing activities that are bound for Europe. So we also need to diversify our portfolio. For POSCO Future M, we will focus on LFP. And in the lithium business, we will focus on LC or lithium carbonate. And so these are some of the shifts that we are planning. Mid- to long-term strategy, lithium capacity is 100,000 tonnes. So we want to be able to establish our client base to be able to exhaust this capacity. And because we've made new investments in hard rock lithium, we will definitely review expansion of facility, but no decisions have been made on any schedules. Additionally, I made a brief comment about our profitability outlook, and I want to add to that. So the lithium mine that we acquired, that will be entered into our books based on the equity method. In 2027, we are planning additional production volume. So please have a look. With that in consideration, I think you will be able to accrue more meaning. And next, we will address the question about steel. Australia's BlueScope equity shares proposal is, I think, the question. Currently, POSCO and NSC have a consortium with BlueScope to acquire the Whyalla Steelworks in Australia. So we already have a consortium. We have not had any discussions about acquiring BlueScope. On China's steel restructuring, my name is [indiscernible] again. The Chinese market on the oversupply in order to respond to criticism from other economies about the oversupply decided to embark on restructuring. So they have decided to abolish the tax refund on exports as one measure, and they're making adjustments to certain country-bound steel products. In January of this year, they announced a new policy for low-priced, low value-added cheap products and to constrain exports of these kinds of products. But because the Chinese domestic market is in a recession, we believe some of this will continue. It will not be in large volumes, and we are going to be able to see some positive signs on this end. That concludes my comments.

The next question will be from [ Hana ] Securities, [indiscernible].

I'm [indiscernible] from [ Hana ] Securities. I also have 3 questions. First question, EU's CBAM and other global export regulations will be in place. how much impact will POSCO take? And how will you address this? And I also have a question about lithium. You mentioned that you expect profits for lithium business to improve. Are there any specific volumes that you have forecasted for sales and production? And finally, there were a lot of safety accidents within the group. These investments and costs related to safety, do you expect it to go up in the future? And will it have meaningful impact on profitability? And can we believe that safety has been secured?

Regarding EU CBAM and quarter, I will tell you about our response measures. EU CBAM will be -- will come into force from October. And currently, we are talking with EU commissions regarding the national quotas. And we are doing our best to make sure that we can have an advantage in this aspect. But we will have to assume that the quota will decrease. And therefore, we will have to take out the low-priced products from our export mix and take that volume into Central and South America and other markets. And next year's steel sales policy focuses on the domestic market. So we will focus on premium products overseas to be able to complement some of these losses to be able to maintain similar levels this year. For the second question, the sales volume is expected to be 55,000 to 60,000. Our plan is to secure enough customers to sell this volume. And this volume is twice that of last year. Our basic plan is 55,000 to 60,000. But depending on the market conditions in the second half, we will review whether we can increase this volume.

I am [ Yoo In-jong ] from POSCO's Group Safety Special Assessment Task Force. Regarding investment and costs for safety and whether it will increase in the future, the facility and other investments that are being made into improving our group safety, I looked into it and I believe that the amount that we invested into safety is not low compared to other companies and putting -- and enhancing the facilities and putting safety equipments in place will not -- we don't need to do mass scale improvements. So we may need to improve bit by bit, but it will not impact the profitability of our company as a safety officer. And whether safety levels increase with more investment the efforts to improve safety, the technology and other measures, the level of safety investment that we have is much higher than other companies. I don't believe that accidents happened here because we didn't make enough investments. Regarding smart safety technology, this is being talked not only in Korea, but all across the world. The technologies that actually help improve safety hasn't been applied on the ground. We are actually leading the industry in this front. But technology that can actually save time and effort to enhance safety, we are making the efforts to apply this. So making -- we don't believe that making the investment itself will significantly impact.

DB securities, Ahn Hoe Soo.

My name is Ahn Hoe Soo. I have about 2 to 3 questions. First, the steel business rationalization and restructuring have been discussed. Do you have any specific plans on these grounds for the future? Next is on lithium. You talked about brine-based lithium plant 2 and technical grade production. If you want to make the shift to battery-grade lithium, what kind of CapEx -- additional CapEx do you need to expand? And the lithium price increase, what is the reason, rationale behind that? If you have more information on why it's rising, that would be very helpful? The third question, you're investing HyREX and you are going to soon operate the electrical furnace. Looking at the group-wide energy mix, what is your plan? And POSCO International, has plans to import 1 million tonnes of gas from Alaska. So what implications does this have on the group-wide business?

I'll answer the second question first. So price is rising sharply. The reason behind that is about threefold. First, the abolishment of the export refund tax. So I think there was some excess demand because of that. And the recent growth of the ESS market. So the actual demand is manifesting here. And the third is the expansion of production in China, there are salt lakes in China, too, but they cannot. They have some structural issues in expanding that. And in the middle of last year, some of the mines had to be closed. And so these are the 3 key reasons that I would provide as rationale for the sharp rise in lithium price. And our lithium is technical grade. Brine-based lithium is all technical grade. It's not just us. So to make that shift to better grade, we need to adopt equipment. So technical grade is 99% purity, battery grade is 99.5%. So we need to be able to reduce impurities by about 0.5% and equipment is required here. So we are studying some of our options. One is in Gwangyang to bring LC from Argentina and to convert that to LH. And so we have a plant called PLS, which is being built now. It's almost completed. So we will refine to produce LH. If we inject CO2 in the process, then it can convert to LC. So this is the very back end that needs to be refined. It's not a huge investment. It's a tweaking of the last part of the process here. So it's going to be a small investment if we decide to invest. And so within the first quarter, we will be reviewing to make a decision.

I will address the first question, steel industry restructuring. My name is [indiscernible]. I'm in charge of Steel Business Management. For steel pipes and long products, I think we're hearing also some restructuring efforts and efforts made to downsize, but no one is really closing down blast furnaces or making new ones. So there is no oversupply. And so this is not an urgent need. But yes, we do need to consider this for the future. So we are in negotiations with [ KOSA and K-Steel ] to forecast when or if this needs to happen. And in line with the changes in the steel industry, we will be aging out some of our older facilities. And we've already done our own equipment restructuring. If we see more facilities that are inferior against the current market trends, then we could consider other investment decisions such as maybe additional HyREX as well.

Let me address the third question. I'm Kim [indiscernible] Carbon Neutral Strategy Office. We have announced NDC 2035. NDC 2030 was a 5.3% reduction for steel. And so this is achievable with the current technology. But for NDC 2035, we need to reduce more, and so we need to transition some of our equipment. At POSCO, blast furnace-based CO2 reduction and EAF-based CO2 reduction are the 2-pronged reduction efforts that we'll be making. In 2030, we will read the situation to assess what will be most efficient, most effective. And so that ratio will change based on what we assess then. In 2028, we will complete the HyREX pilot plant and the energy that will be used is cracked LNG and pink hydrogen is something that we want to be able to make possible there. After 2030, we are in discussions with the government to use nuclear energy.

My name is [ Oh Youngdal ], Infrastructure Business Management Office. Let me address the Alaska project. 1 million tonne LNG import volume, the volume has been agreed to, but we haven't signed any contract. And the conditions, the terms of the agreement are very favorable. But we do have an NDC NDA, that is. And so I cannot share any more detail. But how will this impact the energy mix in the country? I can't answer that effectively because for POSCO International, it imports LNG to generate power. And for POSCO, it has its own LNG demand. So just because POSCO International imports LNG, will that impact POSCO's LNG price? Not necessarily because POSCO will buy its own LNG from other channels. And so the bidding conditions could change numbers, but we are 2 different entities. The cost required to reach carbon net zero, whether this will help POSCO achieve that, I don't think that's an appropriate statement to make. And by importing inexpensive LNG, POSCO International will be able to add efficiency to their power generation. So I think it will assist POSCO International in a meaningful way. That's what I can say. Energy Materials business management, I think I misspoke. [ CP2 ] has not yet completed construction. So 67,000 tonnes is our cap. And this year, we can sell -- we plan to sell 50,000 tons. And so this is still twice the volume that we did last year. I'd like to make a correction.

The next question is from KB Securities, Choi Yong Hyun.

I'm from KB Securities, Choi Yong Hyun. I would like to ask about lithium. And you mentioned 50,000 as the lithium volume. Does this include Pilbara? The margin spread is a bit big. So I'd like to ask about your final figures.

It will be half and half Pilbara and Argentina.

No additional questions. Since we don't have any additional questions, I'd like to conclude the earnings release for 2025. Thank you very much for your participation. [Statements in English on this transcript were spoken by an interpreter present on the live call.]