SONGWON Industrial Group releases Financial Results for Q3/2016
Publishing date: 11.11.2016
- Sales in Q3 totaled 170,582 Mil. KRW
- Gross profit was 41,960 Mil. KRW
- Gross profit margin for Q3 at 24.6%
- EBITDA achieved 11.9% in Q3
Ulsan, Korea – November 11, 2016
SONGWON Industrial Group (www.songwon.com) today published its financial results for Q3. In Q3/2016, gross profit amounted to 41,960 Mil. KRW, with sales for the quarter totaling 170,582 Mil. KRW. The gross profit margin rose over 2015 to 24,6%, and the Group announced a 11.9% EBITDA for the third quarter 2016.
| In Million KRW | Q3 | YTD September | ||||
|---|---|---|---|---|---|---|
| 2016 | 2015 | ∆% | 2016 | 2015 | ∆% | |
| Sales | 170,582 | 173,897 | -1.9 | 532,727 | 487,951 | 9.2 |
| Gross profit | 41,960 | 39,479 | 6.3% | 141,133 | 95,568 | 47.7% |
| Gross profit margin | 24.6% | 22.7% | 26.5% | 19.6% | ||
| Operating profit | 16,046 | 15,153 | 5.9% | 66,422 | 31,058 | 113.9% |
| EBITDA | 20,303 | 34,394 | -41.0% | 89,679 | 71,243 | 25.9% |
| EBITDA margin | 11.9% | 19.8% | 16.8% | 14.6% | ||
| EBIT | 11,614 | 25,935 | -55.2% | 63,452 | 45,545 | 39.3% |
| EBIT-margin | 6.8% | 14.9% | 11.9% | 9.3% | ||
| Profit for the period | 10,357 | 12,244 | -15.4% | 38,150 | 18,155 | 110.1% |
SONGWON reported that market demand remained at a good level throughout Q3/2016. However, lower sales recorded in September were due to destocking by some customers. The company also said that the important growth trend seen in the YTD results for its most significant product lines was continuing, compared to the previous year. In Q3, SONGWON saw its polymer stabilizers selling prices come under some pressure due to price competition, but stated that the selling prices for its other product lines remained stable. The Group’s consolidated sales and profitability were negatively affected in Q3 by the strengthening of the KRW against the USD and EUR.
In Q3/2016, the Group experienced some margin deteriorations resulting from the maintenance shut-down of its Korean plant, in combination with a weakening market demand and a strengthening of the KRW versus USD and EUR. The EBITDA and EBIT margins for the quarter decreased to 11.9% and 6.8% respectively. However, as of the end of September 2016, SONGWON saw them increase to 16.8% (EBITDA) and 11.9% (EBIT) on a year to date basis.
Uncertainties in the medium and long term economic growth scenarios, combined with continued political instability in some world areas, as well as instable forex situations, means that the economic activity outlook will remain volatile in general. SONGWON anticipates that customers will begin preparing for the year end 2016 soon, and will be starting to reduce inventory levels as usual. However, the company believes that any resulting decrease will only be short term and expects demand to continue to grow steadily in the coming months.
Looking ahead, SONGWON expects to see a positive impact from the latest product solutions it launched at the K-Fair 2016 in Düsseldorf, and from its new world-class facility in Qingdao, China coming on-stream in November. Confident that it has the right business strategies in place, and the flexibility to meet the specific needs of its customers and markets worldwide, SONGWON stated that it will continue focusing on leveraging its innovative capability and further expanding its product portfolio, while driving organic growth across the business.