SKC turns red last year with weak performance due to slow demand

SKC swung down to red last year with a weaker-than-expected performance due to slowing demand in petrochemicals and high energy costs.

SKC CEO Park Won-cheol speaks during the SKC Tech Day event held in Gwangjin District, eastern Seoul, on Nov. 23, 2022. [SKC]

SKC swung down to red last year with a weaker-than-expected performance due to slowing demand in petrochemicals and high energy costs.

The chemicals and battery materials manufacturer reported a net loss of 66.7 billion won ($53.2 million) in 2022, compared to a net profit of 342.3 billion won in the previous year, according to its regulatory filing Monday.

The figure far missed the expectation of 241.8 billion won in net earnings compiled by FnGuide.

SKC reported a 45.1 percent decline in the annual operating profit to 220.3 billion won.

Sales grew 38.6 percent to 3.13 trillion won, backed by strong demand for battery components such as copper foil, one of SKC's core businesses.

Yet both figures missed the market consensus.

The sharp increase in electricity bills is "certainly one of the factors" that have affected the top line, as well as the depreciation of the local currency last year, Yi Jae-hong, president and CEO of SK Nexilis, SKC's copper foil-making subsidiary, said in an earnings call.

SKC said in a separate regulatory filing that it expects sales growth within a range of 15-20 percent for this year, or 3.6 trillion won as the median estimate.

For 2022, the secondary battery components business recorded 98.6 billion won in operating profit and 810.1 billion won in sales. SK Nexilis said it plans to start commercial operation of its manufacturing facility in Malaysia later this year.

The chemical segment booked 140.9 billion won in operating profit, with sales coming in at 1.7 trillion won, marking a 55 percent on-year sales growth due to robust demand in North America and Europe.

Sales from semiconductor materials stood at 598.2 billion won, with an operating income of 28.8 billion won.

In the fourth quarter, SKC booked an operating loss of 23.4 billion won, a sharp cut from a profit of 107 billion won a year ago. Sales rose 18.6 percent on year to 763.7 billion won.

BY SHIN HA-NEE, YONHAP [shin.hanee@joongang.co.kr]