Korea Zinc (010130) Q2 2024 earnings summary

Executive summary

• Consolidated sales reached 3,058 bn KRW in 2Q24, up 28.7% QoQ and 23.8% YoY, driven by higher metal prices and a strong USD.

• Operating profit rose to 269 bn KRW in 2Q24, with OPM improving to 8.8%.

• Net profit increased to 175 bn KRW in 2Q24, up 63 bn QoQ.

• The group operates 79 consolidated subsidiaries as of June 2024, up from 74 last year, and is a leading non-ferrous metal smelting group with global operations.

• Major business areas include metal smelting, resource recycling, secondary battery materials, and renewable energy, with recent expansion into e-waste recycling and green hydrogen.

Financial highlights

• EBITDA reached 318 bn KRW in 2Q24, up 91 bn QoQ.

• 2024 H1 consolidated revenue was ₩5.43 trillion, down from ₩7.29 trillion in 2023 H1.

• Operating profit for H1 2024 was ₩453.2 billion, down from ₩659.9 billion in 2023 H1.

• Net profit attributable to controlling interests was ₩283.5 billion in H1 2024, down from ₩527.3 billion in H1 2023.

• Cash and equivalents at period end were ₩938.2 billion.

Outlook and guidance

• Profitability is expected to improve in 3Q24 due to cost reduction and operational efficiency from Fumer optimization.

• The company expects continued volatility in metal prices due to global economic uncertainty, with demand for zinc and lead tied to construction, automotive, and battery sectors.

• Guidance includes ongoing investment in battery materials and recycling, with a focus on expanding nickel refining and copper foil capacity.

• Sales volume anticipated to rise in the second half, driven by strong seasonality in lead demand.

• Announced a mid-year cash dividend of ₩10,000 per share and a new ₩400 billion share buyback program.