S&P Global Ratings revised its outlook on Posco Holdings (KRX:005490) and subsidiaries Posco and Posco International (KRX:047050) to negative from stable, while affirming their respective long-term issuer credit ratings at A- and BBB+.
The negative outlook reflects the potential credit impact of oversupply problems in the steel industry as well as Posco Holdings' weak electric vehicle (EV) battery material segment and increased debt burden, S&P said in a Thursday release.
Uncertainties regarding US steel tariffs and end-market demand offset potential improvements in the company's profitability, the rating agency said.
Posco Holdings' substantial capital investments, particularly in EV battery materials, will limit the improvement in its leverage, keeping adjusted debt-to-EBITDA ratio above 1.5x over the next one to two years.
However, asset sales and possible anti-dumping moves in Korea could balance some of the risks, S&P said.
Notable shifts in the company's profitability and cash flow levels may trigger future rating actions, according to S&P.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.