Kumho Petro Chemical (011780) Q2 2024 earnings summary

Executive summary

• Achieved strong revenue growth in both 2Q and H1 2024, with 2Q sales up 17.4% YoY and H1 revenue up 6.7% YoY to ₩3.52 trillion, driven by synthetic rubber and NB latex demand.

• 2Q 2024 operating profit rose 51.7% YoY to KRW 119.2 bn, while H1 operating profit declined 17.5% YoY to ₩197.8 billion due to margin pressure and increased costs.

• Net income for 2Q 2024 was KRW 131.5 bn, and H1 net profit attributable to controlling interests was ₩234.1 billion.

• All major business divisions contributed to improved profitability in 2Q, with notable turnarounds in phenol derivatives and sustained demand in synthetic rubbers.

• Major business segments include synthetic rubber, synthetic resins, fine chemicals, CNT, construction materials, energy, phenol derivatives, and resort operations.

Financial highlights

• 2Q 2024 sales reached KRW 1,852.5 bn, up 11.1% sequentially and 17.4% YoY; H1 2024 revenue was ₩3.52 trillion (+6.7% YoY).

• 2Q operating profit was KRW 119.2 bn (+51.7% YoY); H1 operating profit was ₩197.8 billion (-17.5% YoY).

• EBITDA for 2Q rose to KRW 182.0 bn (+28.4% YoY); H1 net profit was ₩234.1 billion; basic EPS: ₩8,895.

• Net income for 2Q grew to KRW 131.5 bn (+28.3% YoY); cash and cash equivalents at period end: ₩697.5 billion.

• Total assets: ₩8.54 trillion; total liabilities: ₩2.58 trillion; equity: ₩5.95 trillion.

Outlook and guidance

• Synthetic rubbers: Market prices expected to stabilize in 3Q as supply/demand eases and raw material price fluctuations persist.

• Synthetic resins: Profitability improvement expected to be limited due to weak off-season demand and declining oil/SM prices.

• Phenol derivatives: Spread improvement anticipated in 3Q from benzene price decline and higher Chinese phenol prices.

• Continued focus on global expansion in synthetic rubber and related businesses, with ongoing ESG initiatives and sustainable growth opportunities.

• Market volatility expected due to raw material price fluctuations and global economic uncertainty.