OCI Holdings Company (A010060) Q3 2024 earnings summary

Executive summary

• Q3 2024 consolidated sales reached KRW 909 billion, with operating income at KRW 21 billion, down 4% and 77% respectively from the previous quarter, due to weak polysilicon sales, US module losses, and higher urban development costs.

• Market capitalization dropped by ~30% post spin-off, with YTD stock performance at -33.0%, underperforming KOSPI and sector peers.

• OCIM's sales and operating income declined significantly, and DCRE shifted to an operating loss after recognizing KRW 38.6 billion in additional construction costs.

• Organizational changes are underway in response to unsatisfactory management results and operational challenges.

Financial highlights

• Q3 2024 sales declined 4.3% sequentially to KRW 909 billion; operating income fell 77.1% year-over-year to KRW 21 billion (2.3% margin).

• Net loss recorded after a KRW 54 billion foreign exchange loss due to USD weakness.

• EBITDA dropped 50.8% sequentially to KRW 72 billion (7.9% margin).

• Assets at quarter-end were KRW 7.93 trillion and liabilities KRW 3.79 trillion, both increasing from the previous quarter.

• Debt ratio rose to 63.4% due to higher accounts payable from urban development and long-term advance payments from OCIM customers.

Outlook and guidance

• Q4 outlook depends on the outcome of the U.S. presidential election and AD/CVD tariff decisions, with demand recovery for non-China polysilicon expected in 2025 for U.S. utility projects.

• OCIE anticipates gradual module sales recovery and new solar project sales in Q4 2024.

• OCI Enterprises expects stable revenues with the sale of a 206MW solar project and additional projects in the pipeline.

• OCIPE expects SMP decline due to seasonality but plans to expand steam sales.

• DCRE to focus on construction completion and further pre-sales, though profitability may remain pressured.