Kumho Petrochemical’s Q2 OP up 11%

Chairman Park Chan-koo

South Korea’s Kumho Petrochemical Co. posted an operating profit of nearly 120 billion won ($88.36 million) in the second quarter of 2024 despite a petrochemical supply glut from China.

Kumho Petrochemical said in a regulatory filing on Friday that its operating profit for the second quarter was 119.2 billion won, up 11 percent from the same period a year ago. Sales came to 1.85 trillion won in the April to June period, up 17 percent on year.

This strong performance is credited to Chairman Park Chan-koo’s strategy of focusing on synthetic rubber. Kumho Petrochemical replaced its general synthetic rubber production lines with eco-friendly, high-value-added facilities, increasing the proportion of specialty sales to over 60 percent.

The company is also expected to perform well in the next quarter, thanks to the boom in the tire industry which is related to synthetic rubber.

“Eighty percent of our synthetic rubber sales come from exports,” a company official said. “We will continue to improve our products and maintain our dominance in various synthetic rubber product markets, such as NB Latex.”

Kumho Petrochemical is the world’s top manufacturer of acrylonitrile-butadiene (NB) latex. The company also boasts a stable financial structure, with its debt ratio only 37.9 percent in 2023, down from 660 percent in 2010.

Meanwhile, Kumho Resort Co., which Kumho Petrochemical acquired from Asiana Airlines Inc. for 255.4 billion won in 2021, is also showing solid performance. Its sales topped 100 billion won in 2023, up from the previous year’s 97.7 billion won. Operating profit also increased from 8.8 billion won to 13 billion won over the same period.

“Kumho Petrochemical will start various new businesses from next year, including producing tire materials for electric vehicles, developing carbon nanotubes, and converting rubber processes,” KB Securities Co. analyst Jeon Woo-je said. “It also plans to capture carbon dioxide from its own power plants and recycle it into liquid carbonic acid for sale.”