SONGWON Industrial Group releases Financial Results for Q3/2018

Publishing date: 14.11.2018

•              Sales in Q3 totaled 204,403 Mil. KRW 

•              Gross profit was 42,974 Mil. KRW

•              Net profit amounted to 13,115 Mil. KRW

•              EBITDA achieved 12.6% in Q3 

Ulsan, South Korea – November 14, 2018  

SONGWON Industrial Group today released its financial results for the 3rd quarter of 2018. In Q3/2018, gross profit amounted to 42,974 Mil. KRW, with sales for the quarter totaling 204,403 Mil. KRW. Profit for the period rose over 2017 by 38.4%, and the Group announced a 12.6% EBITDA for the 3rd quarter of the year. 

In Million KRW Q3
2018 2017  ∆%
Sales  204,403180,83213.0%
Gross profit42,97438,62111.3%
Gross profit margin  21.0% 21.4%
Operating profit 17,40014,47820.2%
EBITDA 25,72123,13311.2%
EBITDA margin 12.6% 12.8%
EBIT 17,15915,03114.2%
EBIT margin 8.4% 8.3%
Profit for the period 13,1159,473 38.4%

SONGWON reports that market demand remained strong throughout Q3/2018 and was in line with the company’s expectations despite some monthly fluctuations. Polymer stabilizer sales exceeded the levels reached in the first two quarters of this year and the organization expects this trend to continue. SONGWON felt the benefits of the favorable foreign exchange throughout Q3, and the positive impact from the globally implemented price increases across the portfolio which have been successfully offsetting the higher costs of key raw materials. For some of its products, SONGWON noted a slight decline in demand related to the typical slowdown during the summer period, customers’ traditional destocking activities and scheduled plant shutdowns by large customers in North America.

The Group’s manufacturing facilities supported an optimal cost position for the organization by running smoothly and at high utilization rates throughout Q3/2018. In Q3, SONGWON was able to return to its normal level of OPS production after its Pingdu plant in the eastern Chinese province of Shandong was granted government permission to resume manufacturing at the end of an extended period of audits and inspections.

SONGWON anticipates steady market growth to continue particularly for its PS and Lube AO businesses and in the Asian region. The company’s location offers a clear strategic advantage with short delivery routes and reliable supply. In the final half of the next quarter, SONGWON expects to see customers make their typical end-of-the-year stock reductions that will bring a moderate temporary slowdown in the otherwise strong demand environment. A possible increase in aggressive price behavior to counteract the decline in demand is also anticipated, but SONGWON believes this will only be a temporary phase.

Moving forward, SONGWON will continue its drive to capitalize on long-term growth opportunities through innovation and to maintain earnings quality for the company, it will focus on cost leadership and operational efficiency.