SKC Reports Operating Profit of 155.1 Billion KRW Last Year, Down 22.9% YoY

[Asia Economy Reporter Hwang Yoon-joo] SKC announced on the 5th that its operating profit in 2019 was 155.1 billion KRW, a decrease of 22.9% compared to the previous year. During the same period, sales dropped by 8.2% to 2.5398 trillion KRW, and net profit plunged by 49.6% to 71.1 billion KRW.

SKC stated, "Considering the global economic slowdown, the performance was relatively strong," adding, "In particular, the Industry Materials Division recorded profits for four consecutive quarters."

The Industry Materials Division posted profits for four consecutive quarters, recording sales of 1.0215 trillion KRW and operating profit of 33.8 billion KRW. This was due to stabilized raw material prices, expansion of specialty products such as eco-label and PLA films, and improved performance of global consolidated subsidiaries. In 2020, SKC plans to increase operating profit by expanding eco-friendly, mobility, and mobile specialty products and integrating marketing with its subsidiary SKC High Tech & Marketing.

The Growth Business Division recorded sales of 747.7 billion KRW and operating profit of 15.8 billion KRW, affected by the slowdown in upstream industries and investment delays. From the second quarter, performance is expected to improve due to increased sales of CMP pads and other products. The Beauty & Healthcare Materials Business has entered the peak season for cosmetic materials, and although the Telecommunications Equipment Business is in the off-season, benefits from 5G investments are anticipated.

The Chemical Business Division, which will launch as a joint venture in the first quarter of this year, recorded sales of 770.6 billion KRW and operating profit of 105.5 billion KRW. Although performance slightly declined compared to the previous year due to the global economic slowdown and rising costs, SKC plans to strengthen business competitiveness by continuing to expand high value-added products in 2020. External factors such as regular maintenance of major competitors and stabilized raw material prices are also expected to positively impact performance improvement.

KCFT, which completed its acquisition in January this year, recorded sales and operating profit of 323.4 billion KRW and 62.8 billion KRW, up 28% and 67% respectively from the previous year. Sales increased due to rising demand for copper foil from major customers. In 2020, KCFT plans to fully operate its 4th plant and enhance profitability through additional expansion investments. FCCL's profitability improved due to increased demand and exchange rate gains. In 2020, profitability will be further enhanced through operation of expanded facilities and mid-to-long-term supply contracts.

An SKC official said, "With the effects of the KCFT acquisition reflected from the first quarter, operating profit in 2020 is expected to increase by approximately 67-87% compared to the previous year, reaching between 260 billion and 290 billion KRW," adding, "2020 will be an important year where deep change efforts centered on mobility, semiconductors, eco-friendliness, and displays will yield results."

Dividends remain unchanged at 1,000 KRW per share, the same as the previous year. An SKC official explained, "The decision to maintain the dividend at 1,000 KRW reflects the expectation of growth due to changes in the business model and the commitment to an active shareholder return policy."

This content was produced with the assistance of AI translation services.