Kumho Petro Chemical (011780) Q3 2024 earnings summary

Executive summary

• 3Q 2024 sales reached KRW 1,827.9 bn, up 21.3% year-over-year but down 1.3% sequentially from 2Q 2024.

• Revenue for the first nine months of 2024 increased 11.3% year-over-year to ₩5,347.9 billion, while operating profit declined 18.8% to ₩262.8 billion due to margin pressure and higher costs.

• Net income attributable to controlling interests was ₩287.2 billion, down from ₩446.8 billion in the prior year period.

• Operating profit declined 45.5% quarter-over-quarter to KRW 65.0 bn, with net income dropping 59.6% to KRW 53.1 bn.

• All results are preliminary and subject to audit adjustments.

Financial highlights

• EBITDA for 3Q 2024 was KRW 130.9 bn, down 28.1% from the previous quarter.

• Pre-tax income fell 60.5% quarter-over-quarter to KRW 61.6 bn.

• Net income for the first nine months of 2024 totaled KRW 287.1 bn.

• Gross margin for the period was 9.1%, down from 11.1% year-over-year.

• Basic EPS for common shares was ₩10,952 for the nine months, compared to ₩13,244 in the prior year.

Outlook and guidance

• Synthetic Rubbers: Profitability expected to be protected by expanding high-value product sales amid weak raw material prices.

• Synthetic Resins: Market prices likely to remain weak due to new capacity in China and slow demand recovery.

• Phenol Derivatives: Profitability expected to decline due to maintenance and sluggish demand.

• The company is focusing on high value-added products and global expansion in synthetic rubber and related businesses.

• Ongoing cost control and portfolio optimization are expected to support profitability amid challenging market conditions.