Kumho Petrochemical Reports Record High Operating Profit of 2.4068 Trillion KRW Last Year
"Peaked Last Year, Market Weakness This Year"
[Asia Economy Reporter Moon Chaeseok] Kumho Petrochemical achieved record-high performance last year due to the recovery of the global economy and the favorable conditions in upstream industries.
Kumho Petrochemical announced on the 10th that its consolidated operating profit for last year was tentatively estimated at 2.4068 trillion KRW, a 224.3% increase compared to the previous year. Sales and net profit were 8.4618 trillion KRW and 1.9737 trillion KRW, respectively, marking increases of 75.9% and 238.6%. In the fourth quarter, operating profit rose 51.0% year-on-year to 415.3 billion KRW, and sales increased 58.6% to 2.172 trillion KRW.
By business segment, the synthetic rubber division posted a fourth-quarter operating profit of 117.5 billion KRW, down 20.2% from the same period last year. The company explained that this was due to intensified price competition for NB latex, a material for sanitary gloves whose demand grew during COVID-19, decreased plant operating rates due to maintenance, and minimal improvement in tire general rubber spread (margin).
The synthetic resin division's fourth-quarter operating profit increased 60.5% year-on-year to 52.8 billion KRW. The phenol derivatives division recorded a 128.4% increase to 213.1 billion KRW, and the functional synthetic rubber (EPDM) and eco-friendly rubber (TPV) division posted a 502.5% increase to 23.5 billion KRW in fourth-quarter operating profit.
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Kumho Petrochemical's performance grew last year due to the COVID-19 special demand, but it is expected to decline somewhat this year due to a weak market outlook. A company official said regarding the first-quarter performance outlook, "Demand for general rubber for tires remains solid, but NB latex market prices are expected to weaken due to intensified competition among suppliers," adding, "The synthetic resin division is also expected to see weakness in major products due to decreased demand in upstream industries and price declines in the Chinese market." They continued, "The phenol derivatives division is expected to see reduced profitability due to market price adjustments," and "The EPDM and TPV divisions are expected to see increased profitability due to solid demand in upstream industries."
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