SONGWON Industrial Group announces Q3/2023 Financial Results

Publishing date: 14.11.2023

Today, SONGWON Industrial Group released its financial results for the 3^rd quarter of 2023. During Q3/2023, the Group achieved consolidated sales of 247,867 Million KRW marking a decline in revenue over sales generated in the same quarter of the previous year (350,731 Million KRW). In the 3^rd quarter, SONGWON reported a gross profit margin of 14.7% (Q3/2022: 21.9% Million KRW) and a drop in net profit to 9,372 Million KRW when compared to the 3^rd quarter in 2022 (41,376 Million KRW).
Year-to-date (YTD) September 2023, the Group realized consolidated sales of 784,266 Million KRW, (YTD September 2022:1,031,899 Million KRW) and recorded a net profit of 31,954 Million KRW (YTD September 2022: 123,473 Million KRW).

For Division Industrial Chemicals, Q3/2023 was characterized by weak demand in the markets overall, increased supply availability and lower selling prices. Although Polymer Stabilizers registered lower revenues in Q3/2023 compared to the 3^rd quarter in 2022, the business achieved a positive result due to price adjustments implemented at the end of 2022, newly acquired business and lower shipping costs. Towards the latter part of the 3^rd quarter, SONGWON also observed improved demand for polymer stabilizers in some of its markets. In Q3/2023, SONGWON's Fuel and Lubricant Additives achieved volumes similar to those recorded in the 3rd quarter of 2022 and reported a slight increase in revenues despite the fall in the cost of raw materials between the 2^nd and the 3^rd quarters of 2023. For SONGWON's Coatings, Q3/2023 was a challenging quarter marked by oversupply, subdued demand, volatile order patterns and highly competitive pricing but the business continued to win new customers and advanced its product development strategy.

In line with expectations, Division Performance Chemicals continued to face ongoing demand volatility and economic slowdowns in its key markets in Q3/2023. Tin Intermediates reported improved margins on the back of the higher price of tin, despite recording a fall in revenues and volumes resulting from weak demand overall, especially in the automotive industry. PVC recorded improved margins resulting from new business and a rise in sales in Korea despite the ongoing aggressive competition for volumes throughout the 3rd quarter of 2023. In Q3/2023, Solution Polyurethanes and Thermoplastic Polyurethanes was able to benefit from the stable price of raw materials despite continuing to be negatively impacted by low demand and the economic situation in South Korea.

Looking ahead to the 4^th quarter, the challenging market environment and volatile geopolitical situation are expected to continue with demand remaining weak, order patterns unpredictable and prices volatile. To proactively address the challenging macro environment and ensure it maintains financial resilience, SONGWON will continue executing its strategic objectives and leveraging its extensive industry expertise, global presence, and diverse product portfolio. Going forward, the Group is confident that it is well-positioned to navigate both current and emerging challenges and strategically well-placed to capitalize on emerging opportunities.