Korea Zinc reports 6.5% drop in Q3 operating profit despite revenue surge

(MK database)

Korea Zinc Inc. reported an estimated operating profit of 150 billion won ($107 million) for the third quarter of 2024, down 6.5 percent from the same period during the previous year, the company said in a regulatory filing on Tuesday.

Quarterly revenue totaled 3.2 trillion won, up 39.8 percent year-on-year, while net profit surged 96.5 percent to 152.8 billion won.

The company attributed the lower profitability despite the increase in sales to unfavorable foreign exchange rates and a drop in London Metal Exchange (LME) prices.

The price of lead, which accounts for the second-largest share of Korea Zinc’s revenue, averaged $2,038 per ton in the third quarter of 2024, a decline of over $130 compared to both the previous quarter and the same period in 2023.

Maintenance costs at the Onsan refinery also impacted operating profit. The company advanced its maintenance work in the second quarter due to delays in zinc concentrate supply, and the associated costs were reflected in the third quarter.

Looking ahead, Korea Zinc expressed optimism, citing favorable external factors such as improved exchange rates and rising LME prices alongside proactive maintenance boosting production capacity. The company expects stronger earnings in the fourth quarter, driven by the continued rise in precious metal prices and high copper prices, a key growth driver.

Korea Zinc also expressed concern about the potential impact of an attempt by MBK Partners and Young Poong Corp. to take control of the company, which began in mid-September 2024. Despite this, the company remains focused on achieving its sales targets, protecting shareholder interests, and enhancing long-term returns, the company said.

Korea Zinc’s cumulative consolidated sales totaled 8.64 trillion won as of the third quarter and operating profit was at 603.2 billion won, reflecting year-on-year increases of 18.5 percent and 30.6 percent respectively.