SONGWON Industrial Group announces Financial Results for Q1/2017
Publishing date: 12.05.2017
- Sales in Q1 totaled 174,965 Mil. KRW
- Net profit of 8,284 Mil. KRW recorded
- Gross profit margin at 21.6%
Ulsan, Korea – May 12, 2017
Songwon Industrial Group (www.songwon.com) today announced its audited financial results for Q1. In the first quarter, the Group achieved sales of 174,965 Mil. KRW. When compared to sales in Q1/2016 (Mil. KRW 183,074), this marked a 4.4% decrease in revenue.
| In Million KRW | Q1 | ||
|---|---|---|---|
| 2017 | 2016 (restatet*) | ∆% | |
| Sales | 174,965 | 183,074 | -4.4 |
| Gross profit | 37,862 | 51,185 | -26.0% |
| Gross profit margin | 21.6% | 28.0% | |
| Operating profit | 12,983 | 26,591 | -51.2% |
| EBITDA* | 21,225 | 35,665 | -40.5% |
| EBITDA margin* | 12.1% | 19.5% | |
| EBIT* | 13,102 | 26,882 | -51.3% |
| EBIT margin* | 7.5% | 14.7% | |
| Profit for the period | 8,284 | 12,201 | -32.1% |
After ending 2016 with positive performance and regained investor trust, SONGWON entered 2017 with confidence in its strategy and expectations of improved profitability, despite the challenging market environment. The revenue decline recorded in the first three months of the year compared to the same period last year can be attributed mainly to the effect of the price concessions made in the second half of 2016 in response to tight raw material supply and increased price competition, as well as the negative impacts from foreign exchange. In addition, the raw material trends, price concessions and the unfavorable FX impact were also responsible for the decrease in the EBITDA and EBIT margins to 12.1% and to 7.5% respectively during the quarter.
However, throughout Q1/2017, SONGWON’s production sites ran steadily and in terms of volumes sold, SONGWON reports that demand was stable or continued to grow moderately for most of its product lines. The Group also noted large increases in the demand for polymer stabilizers in the Americas where new polyolefin capacities are coming onstream. The attractive pricing strategy implemented by SONGWON also led to an observable increase in the demand for some of its products in the Eastern European market.
Following the traditional annual period when customers maintain low levels of inventory, Q2 and Q3 are historically strong quarters with increased demand. Therefore, looking forward, SONGWON anticipates the general demand for its products to gradually increase at a rate which slightly exceeds the global GDP. The company also expects its new products lines, and the innovations launched in 2016 to further enhance growth possibilities and positively contribute to SONGWON’s overall performance.
To support further growth in the long term, SONGWON will continue to pursue its strategy, exercise prudent capital management and progress with various initiatives to maintain and increase profitability.