Jungang Advanced Materials Posts Surprise Q3 Strong Performance... "Individual and Cumulative Turnaround, Escaping Capital Impairment"

Jungang Advanced Materials succeeded in turning a profit on an operating basis and escaping capital erosion in the third quarter of this year. This brings the company one step closer to being removed from the investment caution list.

Jungang Advanced Materials announced on the 13th through its third-quarter quarterly report that it recorded an operating profit of 1.07 billion KRW on a separate basis in the third quarter, achieving a turnaround. During the same period, third-quarter sales amounted to approximately 4 billion KRW, and net income reached 39.3 billion KRW. Notably, Jungang Advanced Materials also achieved an operating profit of 400 million KRW on a cumulative basis, offsetting the operating losses from the first half of the year.

A representative from Jungang Advanced Materials stated, “After company-wide efforts, we were able to achieve meaningful results in the third quarter of this year,” adding, “In the fourth quarter, sales from the new lithium salt distribution business are expected to be recognized in earnest, so if this trend continues, it is highly likely that we will achieve a turnaround to profitability on an annual basis this year.”

Lithium salt is a key raw material for electrolytes, one of the four core materials of secondary batteries. Jungang Advanced Materials signed a lithium salt supply contract worth 16.5 billion KRW with Enchem, the largest domestic electrolyte manufacturer, in August and September. This will be recognized as sales for Jungang Advanced Materials starting in October.

The representative continued, “Recently, concerns about capital erosion in the third quarter were resolved through the conversion of convertible bonds (CB) and the deletion of refixing, so if we succeed in turning a profit on an annual basis, we could be removed from the investment caution list as early as the first half of next year,” adding, “We expect to secure a healthier financial structure based on stable performance.”

The designation of investment caution stocks due to five consecutive business years of operating losses and capital erosion is judged based on separate financial statements. Jungang Advanced Materials achieved a turnaround to operating profit and resolved capital erosion on a separate basis in the third quarter, and it is expected to maintain this until the end of this year.

Meanwhile, Jungang Advanced Materials is accelerating efforts not only in the newly launched lithium salt distribution business but also in the lithium salt manufacturing business to achieve successful results. Earlier this year, Jungang Advanced Materials established a joint venture called “IDIEL” with the global electrolyte company Enchem and is building a lithium salt production facility with a capacity of 50,000 tons.

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