SKC

l SKC posts good result despite global uncertainty∙∙∙ Operating profit of Industry Materials Division increases more than three-fold from 1Q.
l SKC secures growth potential through innovation of business models, such as foray into copper foil sector; Chemical Division establishes relationships based on strategic cooperation.

SKC (President Lee Wan-jae) posted 639.0 billion won in sales and 48.3 billion won in operating profit in the second quarter of the year, showing a higher level than securities businesses’ operating profit consensus (forecast average). It is particularly noteworthy that the Company posted an increase in operating profit from the preceding quarter in all of its business sectors.

At a session held at the headquarters of NH Investment Securities in Yeouido, Seoul on August 8, SKC announced the results of its business operations in the second quarter with a number of top-ranking executives in attendance, including Lee Yong-seon, head of the Industry Materials Business Division, Jang Ji-hyeop, head of the PO/POD Business Division, Shin Jeong-hwan, head of the Mobility/Environmentally-Friendly Business Division, and Pi Seong-hyeon, head of the Management Support Division.

Looking at the results by business division, the Industry Materials Business Division posted sales of 256.5 billion won and an operating profit of 11.8 billion won. It is noteworthy that its operating profit continued to record a surplus, showing a more than a five-fold increase year on year and a more than a three-fold increase from the preceding quarter. The overall growth was mainly due to the expansion of specialty products such as PLA film, an environmentally-friendly packing material, and the stabilization of PET raw material prices. The division plans to improve on its results in the third quarter by strengthening cooperation between base film and film processing, although there are concerns about a delay in the economic recovery.

The Chemical Business Division posted sales of 202.3 billion and an operating profit of 29.8 billion won. Although demand for its products decreased due to global trade disputes, the Division managed to increase its sales by implementing a strategy optimized for the outside environment. Notably, it increased its sales by focusing on the U.S. market, where there is strong demand for high value-added PG. The division now plans to push ahead with a variety of initiatives aimed at boosting profitability.

The Growth Business Division recorded sales of 180.2 billion won and an operating profit of 6.7 billion won. Its semiconductor materials saw a decrease in profitability due to the weakening of front-line industries, whereas its CMP pads posted a two-fold increase in sales over the preceding quarter. In addition, its Beauty Health Care (BHC) materials showed an increase in sales thanks to an increase in both export and domestic sales despite the slump in the Chinese market. The division plans to increase profitability overall by coping positively with demand related to the substitution of locally produced goods in the third quarter.

The Company is striving to refine its operational structure. It aims to focus on semiconductors, mobility, and environmentally-friendly materials while increasing high value-added materials. As part of this plan, it also decided to make a foray into the battery copper foil manufacturing sector in June. In early August, it established a relationship based on strategic cooperation worth 1.5 trillion won with PIC, a state-run petrochemical business of Kuwait, in a bid to promote its global strategy of 1 million tons of PO. PIC also promotes global expansion as its core strategy.

Commenting on the results for the second quarter, an SKC executive said, “We intend to transform the Chemical Division into the world’s top player by focusing on high value-added products; to have the Industry Materials Business Division focus on high value-added specialty products desired by customers; and to promote the growth of the Growth Business Division by focusing on the certification and mass production of our products. We also expect KCFT to become a new growth engine through the synergistic effects of its merging with SKC upon completion of the takeover procedure.”