OCI Holdings Q3 Operating Profit Declines... "Considering Expansion of US Solar Value Chain"

Cumulative Sales of 2.7235 Trillion KRW and Operating Profit of 209.3 Billion KRW
Establishment of Vertical Integration System Between US Joint Ventures and Subsidiaries

OCI Holdings announced on the 31st that its consolidated operating profit for the third quarter recorded 20.5 billion KRW, a 77.1% decrease compared to the previous quarter. Sales amounted to 908.8 billion KRW, down 4.3% from the previous quarter, achieving an operating profit margin of 2.3%.

The net loss for the period was 18.7 billion KRW, reflecting a one-time recognition of 38.6 billion KRW in construction costs for the urban development project (DCRE) and a foreign exchange loss of 53.7 billion KRW due to the weak dollar.

OCI Holdings recorded cumulative sales, operating profit, and net profit for the first three quarters of 2.7235 trillion KRW, 209.3 billion KRW, and 195.7 billion KRW respectively, and it is expected to comfortably exceed annual sales of 3 trillion KRW.

OCI posted an operating profit of 17.7 billion KRW in the third quarter, down 19.5% from the same period last year, while sales increased by 30.8% to 588.7 billion KRW compared to the same period last year.

'OCI M,' which produces solar polysilicon in Malaysia, recorded sales of 65 billion KRW, a 63% decrease from the previous quarter, and operating profit of 6 billion KRW, down 89.8%. The sharp decline in orders from major customers was due to uncertainties caused by the AD/CVD (anti-dumping/countervailing duties) investigations related to the U.S. bypassing four Southeast Asian countries.

OCI Enterprise (OCI E), the U.S. solar business holding company, reflected the profit from the sale of the 200MW Hillsboro solar power plant project rights by its subsidiary OCI Energy in August, posting sales of 55 billion KRW, a 53.4% increase from the previous quarter, and operating profit of 7 billion KRW, turning to black.

Sales of the urban development subsidiary DCRE increased by 15.6% from the previous quarter to 124 billion KRW, but it recorded an operating loss of 32 billion KRW due to the settlement of construction costs for previously sold complexes (Complexes 1, 3, and 4). The City O C L supplied by DCRE in the Hakik-dong area of Michuhol-gu, Incheon, recently proved its high popularity with a 100% subscription rate for 1,743 households in Complex 6. Follow-up sales of 1,453 households in Complex 7 are being considered within the year.

Additionally, OCI Holdings explained that non-Chinese solar polysilicon in the U.S. market is maintaining a solid premium. According to market research firm PV Insights, the non-Chinese solar polysilicon supplied by OCI Holdings is maintaining a price of around 20 USD per kilogram.

Chairman Lee Woo-hyun of OCI Holdings stated, "Despite sluggish market conditions and external uncertainties, we will create sustainable growth focusing on future growth and high value-added businesses such as renewable energy and semiconductor materials." He added, "We are conducting careful reviews on expanding the non-Chinese solar value chain, including establishing a local joint venture in the U.S. and building a vertical integration system from OCI M, which produces polysilicon, to Mission Solar Energy (MSE) in Texas, and OCI Energy."

Moreover, with major investment projects sequentially completing from 2026, significant performance growth is expected from 2027. These include OCI Kumho’s epoxy intermediate material epichlorohydrin (ECH) with an annual capacity of 100,000 tons used in electric vehicles and wind turbine blades, OCI M’s capacity expansion for solar polysilicon and chlor-alkali (CA) with an annual capacity of 100,000 tons used as raw material for ECH and secondary battery material cleaning, and the establishment of a semiconductor polysilicon joint venture between OCI and Tokuyama.

Meanwhile, based on cash holdings of approximately 1.7 trillion KRW as of the third quarter, OCI Holdings is actively implementing additional share repurchases to strengthen shareholder returns. The first phase target of 2% (about 40 billion KRW) of shares was fully canceled this month, and a second phase of share repurchases worth 20 billion KRW is planned to be canceled within the year. Furthermore, the company will maintain a minimum dividend per share (DPS) of 3,300 KRW in 2024, which corresponds to a dividend yield of about 5% based on the current stock price.

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