Samhwa Paint Reports Operating Profit of 15 Billion KRW in 2020, Up 33.5% Year-on-Year

Sales of 551.7 billion KRW, Net Profit of 6.5 billion KRW... Up 2.1% and 66.5% YoY
Domestic Architectural Recoating Market and Overseas Key Subsidiaries in Zhijiang and Others Also Show Increased Performance↑

Samhwa Paint 2020 Performance. [Table=Samhwa Paint]

[Asia Economy Reporter Kim Jong-hwa] Samhwa Paints Industrial Co., Ltd. reported consolidated sales of 551.7 billion KRW and operating profit of 15 billion KRW for 2020, representing a 2.1% increase in sales and a 33.5% increase in operating profit compared to the previous year. Net profit for the period reached 6.5 billion KRW, up 66.5% from the previous year.

Domestically, sales were driven by architectural coatings including waterproofing materials, while overseas, sales performed well due to portfolio diversification and strong sales of key items from overseas subsidiaries such as electronic materials, plastic coatings, medium-solid coatings, and powder coatings.

Operating profit was affected by last year's exchange rate decline. Major raw material prices remained relatively stable except for monomers. However, due to increased demand in China affecting domestic supply and demand, urethane manufacturers implemented price increases starting in the fourth quarter, and solvent prices also rose due to oil price increases, causing raw material prices to trend upward after the fourth quarter. Efforts to reduce costs through alternative raw material development and efficient cost execution resulted in a 33.5% increase in operating profit year-on-year, reaching 15 billion KRW.

In the domestic market, although new construction volume decreased, sales growth was driven by increased repainting demand ahead of the revision and enforcement of the Air Quality Preservation Act. Waterproofing material sales also showed noticeable growth in the second half. Powder coatings used in industrial automotive wheels and water pipes, which are affected by upstream industries, saw a slight decrease in sales due to reduced export volume. On the other hand, sales of industrial UCP (Urethane Coated Plywood) coatings increased due to higher exports.

Overseas subsidiaries showed favorable performance despite the COVID-19 pandemic. Samhwa Zhangjiagang in China increased sales by building a stable portfolio through product diversification such as electronic materials and medium-solid coatings. Samhwa Vina and Samhwa VH in Vietnam improved profitability through cost reduction effects such as localizing raw material sourcing and expanding local production. Samhwa Paints plans to maintain stable sales with a diversified portfolio including electronic materials, plastic, medium-solid, powder, and architectural coatings.

Daelim Chemical expanded sales and profit margins through strategic alliances with customers to produce high value-added products.

A Samhwa Paints official stated, "Since the fourth quarter, major raw material prices have been rising, but we plan to firmly maintain the architectural coatings market and lead the market by expanding the launch of functional new products such as antiviral paints," adding, "For industrial coatings, we expect sales recovery with increased demand for powder coatings and PCM, which had been somewhat sluggish due to the impact on upstream industries, once the COVID-19 situation stabilizes."

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