SKC

● Sales of KRW 2.7678 trillion, operating profit of KRW 201.1 billion, YoY increase of 4.3% and 14.5%, respectively

● Credit rating rose to A+ on the back of improved financial structure; dividend per share increased to KRW 1,000 to return shareholders’ profits 

SKC (CEO Lee Wan-jae) posted sales of KRW 2,7678 trillion and operating profit of KRW 201.1 billion in 2018, continuing an upward trend for three consecutive years since 2016. This is attributable to the company’s strengthened portfolio focusing on high-value-added products as its chemical business remains strong. It is the first time since 2015 that operating profit exceeded KRW 200 billion won.

As debt ratio and dependence on loans decreased, financial structure improved and credit rating rose to A+. To reflect its growth, SKC raised its 2018 dividend per share from KRW 900 in 2017 to KRW 1,000 in 2018. The company needs to secure investment funds for growth but reflected shareholders’ expectation for increased return.

On February 13, SKC announced its business performance in 2018 at Kyobo Securities in Yeouido with top executives of each division in attendance, including Executive Vice PresidentWon Ki-don; Pi Sung-hyun, Division Manager of Management Support Division ; Lee Yong-sun, Division Manager of the Industry Materials Business; ; and Oh Jun-Rok, Division Manager of Growth Business Division.

The chemical division recorded sales of KRW 870.8 billion and operating profit of KRW 149.4 billion. Despite the unfavorable business environment due to the market entry of competitors and rising raw material prices, sales of high-value propylene glycol (PG), which is made from propylene oxide (PO), and globalization strategies were successful. In 2019, SKC will continue to strengthen its business competitiveness by expanding global customers of high value-added PG products

The industry materials division recorded sales of KRW 1.84 trillion, but operating profit increased to only KRW 2 billion, due mostly to soaring prices of raw materials. However, the division stepped up its efforts to increase sales by raising product prices, expanding high-value-added products, and strengthening synergy with its processing affiliate. Based on this, the division plans to increase operating profit by expanding sales of high-value products, improving the performance of the affiliate, and launching new specialty products (transparent PI film, PCT film and PLA film)

The growth business division recorded sales of KRW 813 billion and operating profit of KRW 53.7 billion. The semiconductor materials business continued to grow with an operating profit of KRW 22.4 billion. As a result of CMP pad certification, expansion of ceramic parts, and expansion of the semiconductor chemical plant in China, growth is expected to continue into 2019. Domestic demand for beauty and health care materials slowed down a bit, but operating profit came in at KRW 16.3 billion on the back of strong growth in China. The operating profit of telecommunications equipment fell slightly to KRW 15 billion from 2017 due to the withdrawal of low-value businesses.

An SKC official said, "This year's earnings are expected to grow more than last year thanks to the ongoing efforts to expand investments and specialty products. In 2019, we will make further leaps into a global specialty marketer by not only sophisticating business structure by reinforcing eco-friendly, semiconductor and automotive (EV) materials but also finding innovative business models." [END]

<Business Performance in 2018 (Consolidated Basis)>