SK chemicals’ Q3 OP dn 43%, to invest $722 bn for green materials biz

SK chemicals [Provided by Maekyung Media Group]

South Korea’s SK chemicals Co. closed the third quarter with disappointing results on subdued demand from the global economic slowdown but outlined an ambitious plan to invest 1 trillion won ($721.7 million) in green materials business to boost its revenue to 2.6 trillion won by 2030.

The company in its regulatory filing on Monday said its consolidated operating profit for the quarter ended September reached 49.7 billion won, plunging 43 percent from a quarter ago and 54.8 percent from a year earlier.

Net profit narrowed 30.5 percent on quarter but reversed from a loss of 2.86 billion won on year to 41.9 billion won, while sales lost 13.7 percent from three months ago and 16.7 percent against the previous year to total 432.55 billion won.

“Slow sales of customer products due to the global economic slowdown have worsened profit and revenue, but fortunately the profitability still remains solid,” said a company official.

SK chemicals shares were trading 1.44 percent lower at 89,100 won in the morning trade Tuesday.

The green materials business delivered an operating profit of 25.6 billion won after gaining 134 percent on year on sales of 207.3 billion won, up 29.7 percent. The operating margin also improved to 12.4 percent in the third quarter from 6.8 percent a year earlier.

The biopharmaceutical business’s operating profit however fell 32.5 percent to 10.1 billion won with sales down 0.6 percent to 79.5 billion won on increased sales and administrative expenses and decreased medicine prices.

SK chemicals on the same day announced its mid- to long-term strategy that it would achieve 2.6 trillion won in revenue from green materials business by 2030 with an investment of 1 trillion won as part of its green transformation plan.

It aims to earn 1 trillion won from green materials business this year and then continuously expand the revenue to 1.5 trillion won by 2025 and 2.6 trillion won by 2030.

by Song Min-geun and Lee Ha-yeon